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CFTC said on 16 FEB, gold’s COMEX, fund managers increased net long positions by 21,023 contracts to 93,934 contracts from 72,912 contracts on 9 FEB. Fund managers have net long positions highest since 27 Oct 2015.

Asian shares turned negative after rising to a seven-week high as the oil price rally that boosted global equity markets reversed. The dollar index fell from a three-week top.

Spot gold had risen 0.7 percent to $1,217.20 an ounce by 0324 GMT. Bullion had fallen as low as $1,201.63 on Monday, when it lost 1.6 percent on the day as equities rallied.

Bullion could be vulnerable to more corrections if stock markets strengthen, analysts said.

"Prices may stay under pressure at least in the near term," said HSBC analyst James Steel. "Greater investor risk appetite erodes demand for gold. ฺBut the recent decline in gold prices doesn't mean the rally is over, adding that demand for bullion exchange traded funds and possible weakening of the dollar could support the metal.

Top consumers China and India have turned sellers of gold as prices rally. Discounts in India have hit a record high, while prices in China have also turned cheaper relative to the global benchmark, in a sign of waning demand.

Gold has gained this year largely on the back of turmoil in stock markets and concerns over the global economy. But the metal has given back some of those gains as markets have stabilised.

Gold prices are trading around their hourly 100-MA 1216 as investors wait to see if European stocks follow oil and Asian equities lower.

Gold Technical Levels: The immediate resistance is seen at 1223 (daily high), above which the prices could test 1234.53 (Feb 19 high). On the other hand, a breakdown of immediate support at 1212 (23.6% of Dec low-Feb high) would open doors for a slide to 1200 levels.

Reference: Reuters, FXStreet, CFTC