Gold prices fell for a second straight session on Monday as political tensions eased after US President Donald Trump revived hopes of a US-North Korea summit. Spot gold declined 0.4 percent to $1,296.20 per ounce at 0700 GMT, while US gold futures for June delivery fell 0.6 percent to $1,295.60 per ounce.
"It looks like there is some chance of a meeting between the US and North Korea leaders, that would lower the geopolitical risks and lessen the appeal of gold," said John Sharma, an economist with National Australia Bank, adding that a strong dollar was also pressuring prices.
Trump on Thursday called off a planned summit with North Korean leader Kim Jong Un, which lifted gold above $1,300 an ounce level. The yellow metal gained about 0.7 percent last week, in its biggest weekly gain since the week ended April 13.
However, Trump on Sunday said that a US team had arrived in North Korea to prepare for the summit between him and Kim Jong Un.
"Risk sentiment has opened in a much friendly place this morning as a relief rally has ensued with the Trump-Kim summit back on, while the EU is in the midst of a relief rally after Paolo Savona was not endorsed for finance minister in Italy," said Stephen Innes, APAC trading head at OANDA.
Efforts to form a coalition government in Italy collapsed on Sunday after its president rejected a eurosceptic pick for the key economy ministry, triggering a possible constitutional crisis and opening the prospect of fresh elections.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.42 percent to 848.50 tonnes on Friday.
Speculators trimmed their net long position in COMEX gold by 3,800 contracts to 27,527 contracts in the week to May 22, US Commodity Futures Trading Commission (CFTC) data showed on Friday. This was the smallest position since July 2017.