Gold rose on Monday as brewing tensions between the United Sates and China over the novel coronavirus outbreak kindled fears of a new trade war and had investors seeking safe havens.
Spot gold gained 0.4% to $1,705.62 an ounce. U.S. gold futures settled 0.7% higher at $1,713.30.
"There's flight to safety because equities look weak as it is unknown how this is going to play out," said Bob Haberkorn, senior market strategist at RJO Futures. "There probably are going to be a lot of issues coming up over the next couple of months with China, and rest of the world due to this virus." Global stock markets fell on concerns U.S.-Chinese bickering over the origin of the outbreak will ignite a new trade war.
Britain said on Monday that China has questions to answer over the information it shared about the outbreak.
U.S. Secretary of State Mike Pompeo said on Sunday there was evidence the disease emerged from a Chinese lab, but did not dispute U.S. intelligence agencies' conclusion that it was not man-made.
"Given the relative stability of global COVID-19 cases worldwide and the gradual reopening of economies, gold needs a fresh impetus to rally higher," OCBC Bank said in a note.
"Renewed U.S.-China trade hostilities may prove to be the catalyst, but if it does not materialise, we see it challenging for gold to rally from here."
Safe haven gold has risen 12% this year on the back of massive stimulus measures unleashed by global central banks to ease the economic hit from the pandemic.
In the latest evidence of the economic toll, a report showed new orders for U.S.-made goods fell more than expected in March and could sink further.
Easing concerns over global bullion supply chains being strained, which helped drive prices in New York and London further apart than they have been in decades, two of the world's biggest gold refiners, Valcambi and Argor-Heraeus, said they were restoring full operations.
Elsewhere, auto-catalyst metal palladium dipped 2.5% to $1,851.76 per ounce, having earlier hit an over one-month low of $1,824.28.
The state of the automobile sector, which typically accounts for over 80% of world palladium demand, continues to undermine sentiment, INTL FCStone analyst Rhona O'Connell said in a note.
Global car sales have slumped due to measures to contain the pandemic.
Platinum rose 0.1% to $760.62 and silver shed 1.1% to $14.77.