Investing.com - Gold prices were modestly higher on Monday but remained near a 6-month low, as worry over trade remained in focus.
Comex gold futures for August delivery were up 0.21% to $1,281.20 a troy ounce as of 10:28 AM ET (14:28 GMT).
On Friday U.S. President Donald Trump announced a 25% tariff on 818 different Chinese goods worth $34 billion beginning on July 6. China promptly retaliated with a 25% tariff on U.S. goods, including soybeans and automobiles, also worth $34 billion.
The two largest economies in the world have been in a tit-for-tat over global trade tariffs in recent months as the two struggle to reconcile their trade differences. The tariffs have increased chances of a full-blown global trade war as the European Union and Canada have voted to retaliate against U.S. metal tariffs.
Investors often turn to gold in times of political uncertainty, as the precious metal is often considered a safe haven from the impact of geopolitics.
Gold was also held back by a rise in the greenback.Gold is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 94.52, rising 0.08%, as hawkish tones from the Federal Reserve boosted the dollar.
The Fed raised rates for the second time in June March and is expected to raise rates twice more. Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.
Elsewhere on the Comex, silver futures were down 0.06% to $16.470 a troy ounce. Among other precious metals, Platinum Futures fell 0.06% to $887.30 while Palladium Futures increased 0.80% to $989.70 an ounce. Copper futures lost 1.45% to $3.099 a pound.