Gold edged lower on Monday as a stronger dollar outweighed the impact of uncertainty created by Italy's election result and fears of a potential global trade war.
Spot gold was down 0.32 percent at $1,317.91 per ounce at 2:07 p.m. EST. U.S. gold futures for April delivery fell 0.36 percent to $1,318.70 per ounce.
The dollar index, which measures the dollar against major currencies, gained 0.2 percent, having touched its lowest in almost a week earlier in the session But support for gold came from U.S. President Donald Trump's announcement last week that the country would levy hefty tariffs on aluminium and steel imports. This was followed by threats of retaliation from the European Union and Canada.
In Italy, voters delivered a hung parliament on Sunday and if early projections are confirmed, none of Italy's three main groups will be able to rule alone and there is little prospect of a return to mainstream, moderate government.
Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, benefiting along with other haven assets such as the Japanese yen and U.S. Treasuries while stocks tend to trend lower.
"There are fears that a global trade war or protectionist measures will undermine global growth," said Societe Generale's head of metals research Robin Bhar. "People have wanted gold as a hedge against those looming uncertainties."
Gold output from Australia, the world's second-largest producer, may rise to a record as a stream of new projects comes on line, Australian mining consultancy Surbiton Associates said on Sunday. The market was anticipating the release of non-farm payrolls on Friday which will help guide interest rate expectations.
In other precious metals, silver slipped 0.73 percent to $16.37 per ounce.
Hedge funds and money managers increased their net short position in silver contracts to a record high in the week to Feb. 27, U.S. Commodity Futures Trading Commission data showed on Friday, while cutting net long positions in gold.
Platinum, used to reduce emissions in diesel cars, fell 0.52 percent to $957.24 per ounce, while palladium slipped 0.82 percent to $983.60.
Putting pressure on platinum group metals was data that showed car sales in the United States were lower in February and the mayor of Rome said it would ban diesel cars by 2024, MKS SA senior precious metals dealer Alex Thorndike said.