Gold prices edged down on Monday as optimism over possible easing of U.S.-China trade tensions dampened bullion demand, while an outsized U.S. jobs report tempered expectations of interest rate cuts by the Federal Reserve.
Spot gold edged 0.1% lower to $3,310.68 an ounce, as of 0400 GMT. U.S. gold futures lost 0.5% to $3,330.10.
Three top aides of U.S. President Donald Trump will meet with their Chinese counterparts in London later in the day to discuss the trade disputes between the two economies, a standoff that has kept global markets on edge.
"Short-term traders do not want to take aggressive long positions right now ahead of the outcome of the U.S.-China talks," said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA.
Although tariffs won't disappear, the talks may lower the baseline, Wong said, adding that the cost of doing business in the U.S. will remain elevated, and the widening U.S. budget deficit could exacerbate inflationary pressures.
On the technical front, spot gold is expected to retest support at $3,296, a break below which could open the way towards $3,262, according to Reuters technical analyst Wang Tao.
U.S. non-farm payrolls topped expectations, with wage growth exceeding projections and the unemployment rate steady.
Investors scaled back bets on rate cuts for the year from two to only one in October. U.S. CPI data, due on Wednesday, could give more clues.
Meanwhile, Trump said a decision on the next Fed chair would be announced soon, adding that a "good Fed chair" would lower rates.
The bullion, a safe-haven asset, often thrives during uncertainties and in low-interest-rates environment.
China's central bank added gold to its reserves in May for the seventh straight month, official data showed.
Elsewhere, spot silver was unchanged at $35.98 per ounce, platinum edged up 0.1% to $1,170.89, while palladium fell 0.4% to $1,042.52.
Source: Reuters
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