Spot gold fell 1.9pc to $1,989.77 an ounce by 0952 GMT, retreating from last week's record high of $2,072.50. US gold futures declined 1.8pc to $2,003.10.
The dollar index jumped back to 93.568 from Friday's two-year low of 92.495. Having fallen for seven straight weeks, the currency was due for a short-term corrective bounce, traders said.
Bears were caught out by a better payrolls report on Friday, which pushed Treasury yields higher into this week’s massive $112 billion debt sale. Yet the dollar still ended lower for the seventh week in a row.
The Australian dollar also fell, hurt by concerns about worsening U.S.-China relations and the Reserve Bank of Australia’s downbeat assessment of the local economy.
The State Bank of Pakistan reported that in interbank, the price of euro appreciated by 70 paisas to close at Rs. 199.35 against the last day’s trading of Rs. 198.65.