Gold price witnessed a decline in the international market amid low demand, following the US-China trade talks alleviated market fears.
Spot gold fell 1.4 per cent to $3,277.68 an ounce, as of 0233 GMT. US gold futures lost 1.9 per cent to $3,281.40.
“The dollar index has advanced as the Trump administration touted progress in trade negotiations, with China following negotiations over the weekend in Switzerland, which weighed on gold prices,” said Jigar Trivedi, senior commodity analyst at Reliance Securities.
The US and China ended high-stakes trade talks on a positive note on Sunday, with US officials touting a “deal” to reduce the US trade deficit, while Chinese officials said they had reached “important consensus”.
Chinese Vice Premier He Lifeng said a joint statement would be released in Geneva on Monday.
The US and China imposed tit-for-tat tariffs on each other last month, triggering a trade war that fuelled fears of a global recession.
America will be left with higher tariffs once the dust settles from US President Donald Trump’s trade negotiations, a majority of the current and former Trump advisers Reuters spoke to said.
Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-interest rate environment.
On Friday, Cleveland Federal Reserve President Beth Hammack said the Fed needs more time to see how the economy responds to Trump’s tariffs and other policies before figuring out the right response.
Traders are also eyeing the release of the US Consumer Price Index on Tuesday for fresh signals on the Fed’s monetary policy trajectory.