The stronger dollar is weighing on gold prices, Phillip Futures analyst Benjamin Lu said, adding that investors are waiting on the US manufacturing survey by the Institute for Supply Management (ISM) for some forward guidance on US economic conditions. "Better than expected ISM result can give some weakness to gold prices on an intraday basis," Lu said.
Overall risk sentiment was poor and the trade war was likely to create more volatility, benefiting gold, Lu said. China has lodged a complaint against the United States at the World Trade Organization over US import duties, trashing the latest tariff actions as violating the consensus reached by leaders of both countries at a meeting in Osaka.
A new round of tit-for-tat tariffs came in effect on Sunday and although US President Donald Trump has said both sides would still meet for talks later this month, tensions have shown little sign of abating. "I think markets are still structurally bullish, with consistent bearish headlines fuelling gold's climb," said Howie Lee, economist at OCBC Bank.