Spot gold was up 0.4 percent at $1,652.99 an ounce at 1034 GMT, while US gold futures for December delivery were up $7.30 an ounce at $1,653.60. Trading held in a narrow range, however, on uncertainty over US monetary policy.

Prices slid to their lowest since mid-August on Friday after minutes from the Federal Reserve's November meeting suggested policymakers were becoming increasingly concerned over the impact of loose monetary policy on financial markets.

Successive rounds of US quantitative easing, or money-printing to buy bonds, have been a primary driver of higher gold prices in recent years, keeping up pressure on long-term interest rates and fuelling fears over inflation.

"It looks like we are in a period, whether sustainable or not, of some stability, and this is resulting in the moribund performance of the gold price," Deutsche Bank analyst Daniel Brebner said. "That potentially could continue over the next quarter or two."

"But we're not out of the woods yet, and there is still much that the world economy needs in terms of support from monetary policy," he added.

"The whole debt situation remains a major challenge, and accommodative monetary policy is very much seen as a way to minimise the negative repercussions of that. So I don't believe the gold story is over, but certainly, the market is likely to continue to pause."

European shares recovered early losses to edge up 0.1 percent in early trade. German government bonds steadied, while the euro was little changed versus the dollar. The dollar index edged lower.

Markets are awaiting the outcome of a European Central Bank policy meeting on Thursday, as well as Chinese trade data on the same day for pointers as to the health of the global economy.