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Gold prices were mixed on Monday as investors continued to book profits to offset losses in other investments, driven by concerns that a potential global trade war could fuel inflation and dent economic growth.
Spot gold dipped 0.4 percent to $3,026.75 per ounce in European trade while U.S. gold futures were up 0.3 percent at $3,042.84.
Market analysts linked the sharp decrease in gold prices last week to unfavorable global market conditions.
The precious metal experienced a decline exceeding 3 percent on Friday after China announced retaliatory tariffs on U.S. goods in reaction to President Donald Trump's new levies.
Beijing called Trump's tariff plan a "typical unilateral bullying practice" that is "inconsistent with international trade rules."
Responding to the news in a post on Truth Social, Trump argued China "played it wrong" and "panicked," calling the move "the one thing they cannot afford to do."
With Canada and the European Union preparing countermeasures, there's a lot of confusion and uncertainties in the markets about whether there is room for de-escalation ahead.
On the economic front, investors await U.S. reports on consumer and producer price inflation and consumer sentiment and inflation expectations this week for fresh clues on how the Federal Reserve will adjust interest rates in 2025.
Federal Reserve Chair Jerome Powell said in remarks at a business journalist conference on Friday that it is becoming clear that the tariff increases will be significantly larger than expected and the same is likely to be true of the economic effects, which will include higher inflation and slower growth.
He, however indicated the central bank will wait for greater clarity before considering any adjustments to interest rates.
