Spot gold was down 0.2 percent at $1,347.60 per ounce, as of 0739 GMT. US gold futures for February delivery slipped 0.5 percent to $1,345.80 per ounce.
The US dollar is trying to climb back up and that is weighing on gold currently, according to Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "There is a lot of dollar-related buying and selling in the gold market right now."
The dollar crawled up from lows but struggled to pull ahead from six straight weeks of losses on its evaporating yield advantage and doubts about Washington's commitment to a strong currency. "However, gold's weakness due to a stronger dollar and equity markets could be temporary," said Hareesh V, head of commodity research, Geojit Financial Services.
"Gold will touch the $1,400-an-ounce level again as long as it doesn't break the $1,260 mark." The yellow metal had dropped below the $1,400-an-ounce level in September 2013 and has not crossed above the level since.
"The recent strength in equity markets has been keeping gold prices from going higher. When equities start to come down, gold will definitely be the first gainer," Hareesh added. Spot gold may drop to $1,335 per ounce, as a support at $1,347 may not hold, according to Reuters technical analyst Wang Tao.