Analysts note that because oil is an important component in many indexes, it will be difficult for gold prices to fight the weakening trend.
Keeping a lid on gold prices is a massive nearly 7% drop in oil prices last week to a new one-year low.
Eugen Weinberg, head of commodity research at Commerzbank said that not only are oil prices weighing down investor sentiment throughout commodity markets, but the move is also negative for gold because low crude prices will impact inflation expectations, he added.
Jasper Lawler, head of research at London Capital Group, agreed that it would be difficult for gold to rally with a weak oil market; however, growing global economic uncertainty created a compelling environment for safe-haven assets.
"Gold is holding its own, but it's difficult even to buy precious metals when the entire commodity complex is a mess," he said. "I think we consolidate around $1240 for a while, but we will see buying pressure start to build."
Lawler added that despite oil prices, he expects gold prices to continue to hold above $1200 an ounce in the near-term, Kitco reports.
Overnight, the gold price was fixed at $1221.60 per ounce.
The WTI crude oil price was slightly up overnight at $51.34 per barrel.
In softer commodities, cocoa increased $44 per tonne or 2.13% to $2106/t yesterday from the $2062 in the previous trading session, tradingeconomics.com reported. Historically, cocoa reached an all-time high of $4361.58/t in July of 1977 and a record low of $211/t in July of 1965.
Coffee decreased 1.6c per pound or 1.45% to 108.50c/lb yesterday from 110.10c/lb in the previous trading session, tradingeconomics.com reported. Historically, coffee reached an all-time high of 339.86c/lb in April of 1977 and a record low of 42.50c/lb in October of 2001.