By Swati Verma
(Reuters) - Gold prices edged lower on Monday as investors preferred the safety of the dollar in the face of mounting concerns that the U.S.-China trade dispute could slow global growth.
Spot gold dropped 0.4 percent to $1,309.05 per ounce at 12:31 p.m. EST (1731 GMT).
U.S. gold futures declined 0.4 percent to $1,313.1 per ounce.
"Any sort of a lack of agreement between the United States and China weakens the global emerging market currencies and that means, in relative terms, the U.S. dollar does better, which is negative for gold," he said.
The dollar index was at its highest in nearly seven weeks, which could dent demand for the metal amongst holders of other currencies.
Gold could be vulnerable to more corrections if the dollar strengthens further, analysts said.
"With U.S. employment numbers still quite strong and people moving into dollar for safe haven purposes, there is really no good reason why gold should take off much higher," TD's Melek said.
But the yellow metal held above the key $1,300-per-ounce level, supported by uncertainties surrounding the U.S. Federal Reserve's monetary policy and the possibility of another U.S. government shutdown, analyts said.
Among other precious metals, platinum fell 1.7 percent to $784.25 per ounce, after touching its lowest in three weeks at $782.60.
"The spot price of platinum breaking through the $800 level has forced some hedge funds to head for the exit," Walter Pehowich, executive vice president of investment services at Dillon Gage Metals, said in a note.
"With a lack of any good news to support a rally in this market, I expect the sell off to continue."
Palladium slid 1.1 percent to $1,386.02 after rising to its highest in since Jan. 18 at $1,404.50 earlier in the session.
Silver fell 0.7 percent to $15.71 an ounce.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)