US gold futures were also mostly unchanged at $1,312.70 per ounce. "The pull back in the US dollar is driving up commodity prices including gold," said Margaret Yang, market analyst with CMC Markets, Singapore. "The present strength in dollar is not sustainable against the backdrop of very dovish US Federal Reserve. There are plenty of uncertainties for traders to worry about this week, including trade talks and Brexit debate, which should support gold prices."
New round of trade talks between China and the United States started in Beijing on Monday with world's two largest economies trying to hammer out a deal before a March 1 deadline, after which US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. Gold prices fell after hitting a nine-month high at $1,326.30 in late January, mostly due to dollar strength.
A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. For the near-term, the yellow metal is expected to stay above $1,300, which is seen as critical support level in charts followed by technical traders, analysts said.
"Ongoing trade tensions and concerns about weaker global economic growth continue to provide a level of support in the gold market," ANZ analysts said in a research note. Investors are worried about the economic impact of US government shutdown when global growth is already lean.