Gold prices traded within a narrow range on Monday as lingering concerns about trade wars between the United States and the rest of the world offset expectations of a US interest rate hike this month. Spot gold was nearly unchanged at $1,293.23 per ounce, as of 0751 GMT, after hitting its lowest since May 23 at $1,289.12 in the previous session.
US gold futures for August delivery slipped 0.2 percent to $1,297.20 per ounce. Gold is often seen as a safe haven in times of political and economic uncertainty.
"Political issues in Italy and Spain have eased for now, however, there are still simmering trade tensions between the United States and a number of parties that may play a supportive role over the near-term to more so restrict declines rather than see a test higher," MKS trader Samuel Laughlin said in a note. Finance leaders of the closest US allies vented anger over the Trump administration's metal import tariffs on Saturday, ending a three-day meeting with a stern rebuke of Washington and setting up a heated fight at a G7 summit next week in Quebec.
Spot gold may revisit its May 21 low of $1,281.76 per ounce, as its bounce from this level seems to have completed, according to Reuters Technical analyst Wang Tao.
Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.
"It's very common for gold to trade defensive ahead of a Fed rate hike, but with geopolitical risk premium deflating, these narratives should provide a challenge to gold's ambitions this week," said Stephen Innes, APAC trading head at OANDA.