Spot gold was down 1.1pc at $1,497.64 per ounce by 1219 GMT, while US gold futures slipped 1.1pc to $1,506.80.
"The rally in bond markets seems to have paused at least for now and we've seen some additional gains in stocks over the weekend, so a bit of a more optimistic start to the week is helping to attract profit-taking in gold," Saxo Bank commodity strategist Ole Hansen said.
"However, gold is holding above the key support level around $1,480 - $1,485 area. But with bond yields moving up a notch, there isn't much room for gold buyers," Hansen added.
Benchmark US Treasury yields gained on Monday, moving further away from record lows after the closely-watched US yield curve between two- and 10-year bonds inverted for the first time since 2007 on Wednesday.
Equity markets around the world rose, with European markets rising for a second session, as investors cheered signs of moves by Germany and China to counter slowing growth.
Over the weekend, US President Donald Trump and top White House officials dismissed concerns that economic growth may be faltering, saying they saw little risk of recession. Trump also said he was "not ready to make a (trade) deal yet" with China.
DOWNWARD BIAS
Markets are awaiting the US Federal Reserve's Jackson Hole symposium this week for greater clarity on the future path of interest rates. Traders saw an 83.7pc chance of a 25 basis-point cut in September.
"Given the policy uncertainties that may or may not unfold later in the week from Jackson Hole ... gold could consolidate with a downward bias before eventually resuming its upward momentum," Stephen Innes, managing partner, VM Markets, said in a note.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
However, the dollar index was up 0.1pc, hovering near a two-week high hit in the previous session.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.1pc to 843.41 tonnes on Friday from Thursday.
Hedge funds and money managers trimmed their bullish stance in COMEX gold and cut net long positions in silver contracts in the week to Aug. 13, the US Commodity Futures Trading Commission (CFTC) said on Friday.
Elsewhere, silver dipped 0.9pc to $16.93 per ounce. Platinum fell 0.3pc to $846.93 an ounce, while palladium gained 0.6pc to $1,456.81.