Gold prices fell amid ongoing concerns about a potential US interest hike, although some analysts said prices could rise soon.
The price of the precious metal fell nearly 1% to US$1,123 as traders continued to fret about hawkish comments by US Fed chiefs.
San Francisco Fed President John Williams said on Monday that although the Federal Open Market Committee (FOMC) had voted to hold rates at last week's meeting, it was a close call and he expected a rate rise later this year.
The comments sparked fresh rises in the dollar, offsetting some of its losses last week following the Fed's decision.
But analysts at broker SP Angel say potential fresh economic stimulus in China and a fourth round of US quantitative easing could spark an eventual fightback by gold.
They said in a note: "The environment may soon be set for a new rise in gold prices."
Research analyst at foreign exchange group FXTM, Lukman Otunuga, also suggested that any further weakness in China could hit the dollar and revive gold.
"With the Fed expressing that a rate hike may be based on the global and financial developments relating to China growth, if the China flash PMI on Wednesday falls below expectations, it may lead to volatility within the USD, exposing it to further weakness," he said.
Among precious metal miners, Randgold Resources (LON:RRS) fell 66p to 3754p and Mexican silver miner Fresnillo (LON:FRES) dropped 5p to 596.5p.