Gold prices moved sideways on Friday, with markets awaiting further developments on how U.S.-China trade talks would proceed after Beijing said it would take retaliatory measures against Washington for passing a law in support of Hong Kong protesters.
The metal was on track for its biggest monthly decline since November 2016.
Spot gold inched 0.1% higher to $1,460.08 an ounce. It has shed around 3.5% this month alone. U.S. gold futures were 0.4% higher at $1,459.40 per ounce.
China warned on Thursday it would take "firm counter measures" in response to U.S. legislation backing anti-government protesters in Hong Kong.
"(The signing of the bill) takes another step back at the possibility of a trade agreement with China, which really upset them quite a bit. That is why we saw equities come off and gold futures push up," said Phillip Streible, senior commodities strategist at RJO Futures.
Investors have hopped on to the possibility that a "phase-one" trade deal between the world's two largest economies could be signed soon, spurring world stocks to hit record levels and dampening demand for safe haven assets such as bullion.
Gold, generally considered a hedge during times of financial or political uncertainty, fetches little interest and costs money to store and insure. However, gold prices were still on track for their best year since 2010, having gained 13.5% so far in 2019.
Uncertainties surrounding the long-drawn trade war and recessionary fears have provided support.
"Gold has managed to hold above $1,450 since there is some bargain hunting. This is a good entry level for the ones who missed out previously," said UBS commodity analyst Giovanni Staunovo.
Investors are closely watching U.S. data for signs on the health of the world's largest economy, which could influence the U.S. Federal Reserve in its decision on further monetary easing.
Reduced expectations of further interest rate cuts by the Fed has weighed on spot gold prices, RJO Futures' Streible added. "We could go down to $1,425 by the end of the year."