Global gold prices dip as US-Iran tensions ebb

"With no immediate retaliation from Iran, some of the tensions have simmered. Also, we've seen some profit-taking coming in," said Jeffrey Halley, a senior market analyst for the Asia-Pacific region at OANDA.

"If things de-escalate (with Iran), then gold will hit lower quite quickly. We would see it go down below $1,500."

Gold, considered a safe asset in times of political and economic uncertainty, had jumped in the last two sessions on concerns of a wider conflict after a US airstrike killed Iran's top military commander Qassem Soleimani last week.

Markets were worried about conflicting reports about American military repositioning troops in preparation for leaving Iraq.

Further weighing on gold, Asian shares rebounded on ebbing Middle East tensions.

Additionally, oil prices relinquished gains on speculation that Iran might not strike against the United States in a way that would disrupt supplies.

However, risks of escalating tensions persisted, with the United States denying a visa to Iranian Foreign Minister Mohammad Javad Zarif that would have let him attend a United Nations Security Council meeting in New York on Thursday.

"With $15-$20 setbacks the new intraday norm (in gold), look for volatility to remain elevated," Stephen Innes, a market strategist at AxiTrader, said in a note.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.10 percent to 896.18 tonnes on Monday, their highest since Nov. 27.

Speculators increased their bullish positions in COMEX gold and silver contracts in the week to Dec. 31, data showed.

Elsewhere, spot palladium fell 0.3 percent to $2,024.75, off an all-time peak of $2,032.94 an ounce hit earlier in the session.

The industrial metal, suffering from sustained supply woes, gained about 54 percent in 2019.

Silver slipped 0.5 percent to $18.05 an ounce, after touching a more than three-month high at $18.50 in the previous session, while platinum advanced 0.3 percent to $965.76.