Washington began imposing 15% tariffs on a variety of Chinese goods on Sunday, including footwear, smart watches and flat-panel televisions, as Beijing began imposing new duties on U.S. crude.
Spot gold was up 0.2% at $1,522.1 per ounce at 0742 GMT, having fallen to a one-week low at $1,517.11 in the previous session.
U.S. gold futures were flat at $1,529.50 an ounce.
"The reality of the trade war with the new tariffs being implemented over the weekend has kept a risk-off tone in markets this morning," said ANZ analyst Daniel Hynes.
U.S. President Donald Trump said both the sides would still meet for talks later this month.
"There is still a very high level of scepticism. Traders want to see talks restart with both parties suggesting some positive outcomes before any optimism around the progress sets in," Hynes added.
Escalation in the trade war between the world's biggest economies and heightened fears over a global economic downturn contributed to a rise of more than $100 for gold in August.
A private business survey showed on Monday China's factory activity unexpectedly expanded in August as production edged up, but orders remained weak and business confidence faltered amid Sino-U.S. trade woes.
Global stocks fell on Monday as the imposition of new tariffs reinforced investors' worries over slowing global growth, with no clear end in sight for the trade war.
On the technical front, "near-term supportive interest sits around $1,515-$1,520, while resistance cuts in toward $1,535 with extension toward $1,550," MKS PAMP said in a note.
"At current levels, both CFTC (Commodity Futures Trading Commission) and ETF (exhange-traded fund) positions remain bullish and are likely to continue to be so over the near-term should price action remain firm broadly around $1,500-$1,480."
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.23% to 878.31 tonnes on Friday. However, it was up about 12% for the year so far.
Speculators increased their bullish stance in COMEX gold and upped net long positions in silver contracts in the week to Aug. 27, U.S. CFTC data showed on Friday.
Among other precious metals, silver dipped 0.2% to $18.31 per ounce.
Spot platinum climbed 0.5% to $935.45 per ounce, while palladium was up 0.4% at $1,536.55.
Trading could be subdued as U.S. financial markets are closed on Monday for the Labour Day holiday.