Gold prices dropped more than 1% on Monday, weighed by a spike in U.S. Treasury yields and a stronger dollar, and as hopes of progress in Russia-Ukraine peace talks dented demand for the safe-haven metal. Spot gold fell 1.4% to $1,929.43 per ounce by 1106 GMT. U.S. gold futures dropped 1.3% to $1,927.30.

"Adding to the woes for gold at the moment we got significant dollar strength and significant increases in the 10-year Treasury yields," said independent analyst Ross Norman. "We've seen a large part of the war premium in gold already taken out, but maybe there's a little further to go. So, gold is currently facing a significant headwinds on all three fronts."

The benchmark U.S. 10-year yields rose above 2.5% to their highest level since May 2019 as bets of big rate hikes by the Federal Reserve to fight soaring inflation hammered bond markets. Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced.

The dollar index rose to a more than one-week high, making gold more expensive for other currency holders.

"We believe the rise in yields and thus the increase in real interest rates are due to the higher interest rate expectations of market participants," Commerzbank analysts said in a note. "In our view the gold price is holding its own impressively well against this backdrop.

ETF investors have also not allowed themselves to be deterred as yet." With peace talks between Russia and Ukraine set to take place in Turkey this week, Ukrainian President Volodymyr Zelenskiy has insisted on the territorial integrity of his country after earlier suggesting he was ready for a compromise. Silver dipped 2.3% to $24.93 per ounce and platinum shed 1.8% to $984.19, while palladium fell nearly 4% to $2,244.61.

(Reporting by Brijesh Patel in Bengaluru; Editing by Amy Caren Daniel and Louise Heavens)