Gold prices slipped as much as two percent on Monday, as the dollar strengthened and investor appetite for risk increased. But the metal remained above $1,200 an ounce after a rally that pushed prices to one-year highs this month.

Concern over financial instability and the repricing of expectations for U.S. interest rate rises, has helped gold outperform most assets so far this year with a 15 percent gain.

Spot gold was down 1.6 percent an ounce.

Top consumer China has been selling gold since its return from a week-long holiday last Monday, a sign Chinese investors do not expect prices to go much higher and cannot be counted on to support the market.