Gold futures on the COMEX Division of the New York Mercantile Exchange further declined on Monday, as disappointing economic data around the world curbed prospects for commodity demand.

The most active gold contract for April delivery shed 5.9 dollars, or 0.35 percent, to 1,703.9 dollars per ounce. The metal suffered sharp decline last week, losing 3.7 percent.

Market analysts said China's statements have significantly dampened market sentiment. China cut its 2012 growth target to an eight-year low of 7.5 percent from eight percent, but kept its inflation target unchanged at four percent.

Meanwhile, the Markit euro-zone composite purchasing managers index fell to 49.3 in February from 50.4 in January. U.S. factory orders also slipped one percent in January.

However, gold's losses were limited as the dollar eased against the euro, which rebounded despite lingering worries about Greece's progress on a debt deal. The Dollar Index dropped 0.1 percent to trade around 79.322 on Monday.

Analysts say while gold is likely to consolidate in the short term, in the longer run it remains firmly underpinned by relaxed U. S. monetary policy, portfolio diversification and strong physical demand from Asia.

Silver for May delivery fell 83 U.S. cents, or 2.4 percent, to 33.695 dollars per ounce.