Gold prices finished with a loss on Monday, as pressure from a firmer U.S. dollar and gains in the stock market offset earlier haven support from jitters about a potential trade war and uncertainty for the European Union following Italy's divisive election.
April gold GCJ8, +0.27% shed $3.50, or 0.3%, to settle at $1,319.90 an ounce after an earlier high near $1,329. The contract has been volatile considering that gold prices had settled at their lowest levels of the year just last Thursday, after recording the first monthly loss last month since October.
Gold futures had settled with a sharp gain Friday, trimming the weekly loss to 0.5%, as the threat of a global trade war in the wake of U.S. steel and aluminum tariffs and potential retaliation pushed stocks and the dollar lower. U.S. stocks traded lower Monday, while the dollar index strengthened.
Read: Trade-war fears cast shadow over stock market
President Trump continued to tweet on the subject over the weekend, at one point threatening to slap a tariff on European autos, should the European Union's retaliate with tariffs of their own.
The trade-related market churning had underpinned a flight to the perceived safety for assets such as precious metals.
But strength in the dollar Monday, with the ICE U.S. Dollar Index DXY, -0.10% up 0.1% to 90.06, weighed on prices for precious metals, which are traded in the greenback. The dollar index had touched six-week highs last week on a fortified outlook for continued U.S. interest-rate hikes this year before trade concerns knocked the buck lower Thursday and Friday.
U.S. stocks, meanwhile, bounced back from earlier losses on the back of some positive economic data, dulling some of gold's investment appeal.
May silver SIK8, +0.29% also fell 5.4 cents, or 0.3%, to $16.412 an ounce. Silver had touched a two-month low last Thursday on its way to recording a weekly decline of 0.3%. The silver-focused exchange-traded iShares Silver Trust SLV, -0.45% lost 0.7% while the SPDR Gold Shares GLD, -0.17% traded down 0.2%.
Read: Silver's poised to outpace gold this year
Meanwhile, "the Italian elections on Sunday that produced no clear winner threw fresh uncertainty into the marketplace," said Jim Wyckoff, senior analyst at Kitco.com.
Voters delivered a hung parliament on Sunday and if early tabulations are confirmed, none of Italy's three main political parties will be able to rule alone. Analysts say there is little prospect of a return to mainstream, moderate government giving rise to a louder euroskeptic, populist voice.
Italy wasn't the only nation in the spotlight. A new bipartisan governing pact sealed Sunday in Germany could further fuel voter discontent with longtime incumbents in the European Union's most important country, potentially sapping Chancellor Angela Merkel's authority in what is expected to be her final term, The Wall Street Journal reported.
Meanwhile, industrial metals finished mostly lower, with the exception of copper, as traders assessed the potential impact of tariffs, including the long-run impact on economic growth.
May copper HGK8, +0.30% settled at $3.128 a pound, up 0.1%.
April platinum PLJ8, +0.32% fell 0.3% to $962.10 an ounce, remaining near the two-month lows hit last week. June palladium PAM8, +0.52% fell 0.9% to $977.50 an ounce after a weekly drop of 2.7%.