The long-term outlook remained positive and some analysts saw the metal moving towards the last month's high of $480.25 a troy ounce - the highest in about 18 years, and eventually trying to touch the big $500 mark.
Spot gold was quoted at $457.60/458.50 an ounce by 1538 GMT, up from Friday's near-two-month low of $455. It had closed in the US market at $456.20/457.00.
"I think the shorter-term trend is definitely for a bias to the downside. Both technical factors and currency movements are not positive for gold at the moment," said Yingxi Yu, precious metals analyst at Barclays Capital.
The dollar scaled a 26-month high against the yen and a 18-month peak against the euro on Monday, with investors betting that the US interest rate outlook would continue to underpin the greenback.
A strong US currency often makes dollar-priced gold costlier for holders of other currencies and lowers demand.
"It's an investor-driven market at the moment," said David Holmes, vice president of commodities at RBC Capital Markets.
"It's really a matter of time before we see another round of long liquidation," he said adding gold could decline to $450 an ounce in the near term.
Some dealers said physical demand had resurfaced at lower prices and would help gold from falling too far.
Some analysts said the long-term outlook was bullish.
"A quick return to last month's high of $480 is more than doubtful," Wolfgang Wrzesniok-Rossbach, the head of precious metals at Heraeus, said in a report.
"Looking far beyond this week's potential price moves, we continue to be bullish for the yellow metal, not ruling out price above $500 during the course of the winter," he said.
Many analysts have predicted gold rising to $500 an ounce or more on the back of growing consumption, less hedging at forward fixed prices and restraint among the world's central banks to sell much of their reserves.
But Holmes of RBC Capital said the target was difficult.
"It's looking a lot harder. The fact that we have pulled back some 25 dollars from the year's highs, it's really going to make it quite tricky to get $500."
"I will be quite pleased to see gold get back to $485 level."
In other metals, silver was quoted at $7.47/7.50 a troy ounce, compared with $7.52/7.55 last quoted in the US market.
Platinum fell to $928/931 an ounce from $929/933, while sister metal palladium was higher at $224/227, compared with $220/225.