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Gold prices rose in Asian trade on Monday, snapping a 3-session losing streak, buoyed by physical buying after the metal slid to a 5-1/2-month low on Friday.

Spot gold was up 0.42 percent at $1,213.31 an ounce by 0655 GMT. In the previous session, the metal fell as much as 1 percent to mark its lowest since May 30 at $1,203.52.

The low prices have induced some interest in the physical market," said ANZ analyst Daniel Hynes. "However, the dollar has got some momentum behind it and until a turnaround, it is going to be difficult for gold prices to recover." "There are chances for prices to weaken below $1,200 in the next few weeks leading into the Federal Open Market Committee (FOMC) meeting," Hynes added.

Markets now put a 90 percent chance on the Fed hiking rates by 25 basis points when they meet on Dec. 14. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

"We expect gold to continue to struggle against a backdrop of a firmer U.S. stock market, a stronger dollar and rising global rates," Edward Meir, analyst with INTL FCStone, said in a note.

“People don’t like having gold under a rising interest rate environment,” Bob Takai, chief executive officer and president of Sumitomo Corp. Global Research Co., said by phone from Tokyo. Trump’s policies would be “very, very inflationary, the interest rate is most likely to rise, and the dollar is most likely to rise too,” he said. While that means gold “is going to be the biggest victim,” Takai said it still makes sense to hold some gold to hedge against geopolitical risk.

Reference: Bloomberg, Reuters