Spot gold was down 0.1 percent at $1,331.83 an ounce as of 0700 GMT, and U.S. gold futures were nearly unchanged at $1,335.70 an ounce.
• "We've had certain comments from the United States about trade conflict over the last week and this weekend. The market is being dismissive about those issues until they see any real impact on the ground," said ANZ analyst Daniel Hynes, adding there was a little bit of a sell-off in the gold market as a consequence.
U.S. President Donald Trump predicted on Sunday that China would take down its trade barriers, expressing optimism despite escalating trade tensions between the two nations.
Trump late on Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a "fierce counter strike".
• "I think the market is getting numb with the current trade war news. It is really hard to judge on sentiment as there is no way to know beforehand as to how the trade war evolves," said Samson Li, an analyst with Thomson Reuters GFMS.
"Both parties may say something new every day. However, in the near-term, we should be wary to the downside actually."
• Elsewhere, easing tensions between the United States and North Korea dampened the appeal of gold, which is often used as a store of value during times of financial or political uncertainty.
North Korea has told the United States for the first time that it is prepared to discuss the denuclearization of the Korean Peninsula when their leaders meet.
• The dollar steadied on Monday, having retreated late last week due to concerns over U.S.-China trade tensions and following data that showed the U.S. economy created the fewest jobs in six months in March.
However, a pickup in wage gains pointed to a tightening labour market, which should allow the Federal Reserve to raise interest rates further this year.
· Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.
• Hedge funds and money managers slashed their net long position in COMEX gold in the week to April 3 and boosted their net short position in silver to a record, U.S. Commodity Futures Trading Commission data showed on Friday.
• Spot silver climbed 0.2 percent to $16.38 per ounce and platinum rose 0.5 percent to $916.74 per ounce.
Palladium gained 0.6 percent to $905.50 an ounce after hitting $895.47 on Friday, its lowest since mid-August 2017.
• Although gold prices could test the top end of their range, around $1,350 an ounce, as the market finds support from disappointing labor market data and escalation of trade war rhetoric between the U.S. and China, analysts are not expecting to see a breakout anytime soon.
“I think we could see gold prices push higher by $10 or so but ultimately, interest rate expectations are firmly in place and that will support the U.S. dollar and weigh on gold,” said Bart Melek, head of commodity strategy at TD Securities.
· Ole Hansen, head of commodity strategy at Saxo Bank, said in a recent research note that silver could be the reason why gold has been able to break near-term resistance at $1,355 an ounce. For now, he looks for gold to remain range-bound in the short-term.
“The uncertain geopolitical outlook and increased stock market volatility is likely to continue to provide some underlying support,” he said. “There's no doubt, however, that multiple rejections since 2016 are likely to have sidelined potential buyers who are now happy to sit on the fence while waiting for a potential break above $1375/oz, 2016 high.”
• David Madden, market analyst at CMC Markets, said that he sees two factors that could drive gold prices higher: weaker equity markets or a weaker U.S. dollar. He added though that there is no indication that investor sentiment is going to shift anytime soon.
Both the Dow Jones Industrial Average and the S&P 500 have managed to hold on to their long-term uptrend, bouncing off critical technical support at their 200-day moving averages. Although there is growing uncertainty in the marketplace, Madden said that consistent investor optimism will continue to support prices.
He added that both the Dow and the S&P 500 have to push clearly below their 200-day moving averages if gold is going to find enough momentum to break its range.
• For now, analysts are watching near-term resistance between $1,355 and $1,360 an ounce with a break of that level signaling a move to the 2016 high at $1,375 and then the push to $1,400 an ounce.
On the downside, many technical analysts say that gold remains in an uptrend as long as prices can hold critical support at $1,300 an ounce. In the near-term analysts are watching initial support at $1,325 an ounce.
Thai
Eng