Gold climbed to $1,070.50 (+0.35%), but stayed near a six-year low amid expectations for an imminent interest rate hike by the Federal Reserve. Several Federal Reserve's officials signaled recently that they see sufficient improvements in the economy and they are ready for a liftoff soon.

Higher rates would harm demand for the non-interest-bearing precious metal.

Physical demand in top consumers China and India supports prices, however it cannot withstand falling investor demand. SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, said its holdings fell to 655.69 tonnes on Monday, the lowest since September 2008.