Gold muted as rising US yields curb appeal

"If yields continue to rise, this may drag the precious metal lower despite the risk-off mood," said Lukman Otunuga, senior research analyst at FXTM.

Benchmark U.S. 10-year Treasury yields rose for third straight day, increasing the opportunity cost of holding non-interest bearing bullion.

However, "the U.S. dollar index is weaker today ... That's positive for the metals market, so I wouldn't be surprised to see this pullback as a buying opportunity for the shorter term futures traders," said Kitco Metals senior analyst Jim Wyckoff.

The dollar index hit a more than two-month low in the session, helping gold pare its earlier loses.

Investors were also awaiting the U.S. consumer price index for April, due on Wednesday, to gauge whether the Federal Reserve will begin to alter its stance on inflation.

At a time of heavy government stimulus, gold is considered a hedge against potential inflation.

Fed officials would like to see higher inflation, more wage growth and several months of strong employment gains before they consider adjusting monetary policy, Chicago Fed Bank President Charles Evans said on Monday.

"Bulls remain in control as long as $1,800 proves to be reliable support ... A solid weekly close above $1,840 could signal a move higher towards $1,855 and $1,870, respectively," FXTM's Otunuga said.

Elsewhere, palladium fell 1.1% to $2,928.00 per ounce, while platinum was down 0.6% at $1,240. Silver gained 0.8% to $27.54 per ounce.