Investing.com - The luster of the gold isn't powerful enough for those seeking a hedge to the trade war.
Gold prices fell back on Monday, settling down for the sixth time in seven sessions, as investors turned again to the relative safety of the dollar amid the drag in U.S.-China trade negotiations.
Bullion and gold futures got a reprieve on Friday, outshining the dollar, as the U.S. and China hold talks ahead of the March 1 deadline for Beijing to strike a trade deal with Washington or risk having tariffs on $200 billion of imports raised to 25% from 10%.
"Currently, the price of gold is under pressure as the dollar Index continues to rally versus other world currencies," said Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas.
"If the rally continues, technical support levels in the price of gold will be tested," Pehowich added. "Spot support levels will be the previous resistance levels at $1,303."
The spot gold contract, reflective of trades in physical bullion, was down $5.66, or 0.4%, to $1,308.60 per ounce by 3:39 PM ET (20:39 GMT).
In futures trading, gold's benchmark April contract on the Comex division of the New York Mercantile Exchange settled down $6.60, or 0.5%, at $1,311.90 per ounce.
The dollar index, which tracks the greenback against a basket of other major currencies, rose 0.5% to near one-month highs of 96.917.
Both the spot price and futures of gold fell 0.3% last week after declining four consecutive sessions.
The lack of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping has dampened hopes for a smooth resolution to the U.S.-China trade war, one of the most intense rivalries of this generation. U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will still be in China this week for another round of talks.
Gold futures hit highs above $1,300 for five-consecutive sessions through Jan. 31, peaking at $1,331.10, as investors raised their stakes in the yellow metal amid Fed reassurances that it will be patient with rate hikes.
Palladium remained the world's most valuable traded metal, despite its spot price sliding by $17.85, or 1.3%, to $1,388.10 per ounce.
Spot palladium first traded above gold last month when it hit record highs of $1,440.35 on Jan. 17. Gold's own peaks have been higher in the past, rallying above $1,900 in 2011.
Trades in other Comex metals as of 3:39 PM ET (20:39 GMT):
Palladium futures down $10.75, or 0.8%, at $1,360.45 per ounce.
Silver futures down 11.2 cents, or 0.7%, at $15.70 per ounce.
Platinum futures up $14.30, or 1.8%, at $788.20 per ounce.
Copper futures down 2.3 cents, or 0.8%, at $2.79 per pound.