The bullion had hit this level after tit-for-tat tariffs by the US and China escalated trade tensions, and boosted demand for safe-haven assets. US gold futures were also up 0.1% at $1,538.70 an ounce. "The main news is (US President Donald) Trump has commented that he is ready to negotiate with China, and China has also said they want a deal to happen," said Renisha Chainani, head of commodity and currency research at Monarch Networth Capital in Ahmedabad, India.
"This has changed the sentiment in the market from risk-off to risk-on, and safe haven assets are seeing some profit booking. This is a knee-jerk reaction." Trump said on Monday China had contacted US trade officials overnight to say they wanted to return to the negotiating table. Earlier, Chinese Vice Premier Liu He had said that China opposes the escalation of the trade conflict, a state-backed newspaper reported.
Spot gold may peak in a range of $1,546-$1,569 per ounce, said Reuters technical analyst Wang Tao. Indicative of market sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.58% to 859.83 tonnes on Friday. Hedge funds and money managers increased their bullish stance in COMEX gold in the week to August 20, the US Commodity Futures Trading Commission said on Friday.