Gold prices edged lower on Monday, pressured by a strong US dollar amid prospects of higher interest rates, while global trade tensions kept the metal buoyed above a six-month low hit last week. Spot gold was down 0.3 percent at $1,264.70 an ounce as of 0624 GMT.US gold futures for August delivery were 0.3 percent lower at $1,266.60 per ounce.
"There are specific factors that will actually push the dollar higher, given the trade tensions as well as the booming US economy versus other economies," said OCBC analyst Barnabas Gan.
"Gold prices are very much influenced by the dollar movement rather than anything else. It's less of a safe-haven demand into gold but rather a reaction to USD strength."
Gold usually gains from political and economic tensions, but has struggled this time around as the dollar has risen strongly, making the dollar-priced metal costlier for non-US investors.
"The overhang of higher US interest rates and dollar continues to hold relatively firm as dealers sell on rally. We need the dollar to weaken significantly to get above $1,282," said Stephen Innes, APAC trading head at OANDA.
Gold prices hit a six-month low last week, weighed down by a firm dollar and as the Fed kept its outlook for higher interest rates.
Meanwhile, speculators trimmed their net long position in COMEX gold to the weakest in 2-1/2 years in the week to June 19, data from the US Commodity Futures Trading Commission showed on Friday.