Gold futures start April with climbing as the dollar declines, but gains were trimmed on expectations that the Federal Reserve is on course to lift interest rates this year.
Spot gold was up 0.2 percent at $1,185.65 an ounce by 0632 GMT, after ending March with a loss of 2.4 percent.
U.S. gold for April delivery rose 0.2 percent to $1,185.50 an ounce.
Bullion has plunged nearly 3 percent since touching a three-week high last week, as the dollar gained backed by Fed Chair Janet Yellen's comments suggesting a rate hike is still on the cards for later this year.
Yellen's remarks halted a seven-day rally in gold, its longest since 2012, that had been spurred by hopes the Fed would take it slow in raising rates.
Market players are awaiting U.S. jobs data due on Friday, when another strong number could boost speculation that the U.S. central bank will hike interest rates sooner rather than later.
A number of economists have forecast a 244,000 rise in
non-farm payrolls in March, which would mark the 13th straight
month of job gains of over 200,000, matching a run in 1994-95, Reuters says.
The Fed will have a "strong" case to hike interest rates in June, Richmond Fed President Jeffrey Lacker said, dismissing recent weak U.S. economic data as transitory and perhaps due to unseasonable weather.
On Wednesday the greenback slipped against its peers, making dollar-denominated assets such as gold cheaper for holders of other currencies.
Buying interest from China, the world's second largest gold consumer after India, is "relatively soft" at current prices, said Chen Min, analyst at Jinrui Futures in Shenzhen, adding that buyers are waiting for prices to fall below $1,100.
The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Trust, in March recorded its biggest monthly outflow since December 2013.
Market players were also keeping an eye on talks between Iran and six world powers to settle a dispute over Tehran's nuclear programme as discussions extended beyond a Tuesday deadline.
A deal could see the dollar "sell off slightly thus giving gold a bit of a lift," INTL FCStone analyst Edward Meir said in a note.
