Gold stabilised on Monday, rebounding earlier from a two-week low as stocks fell before the Federal Reserve (FED) released the minutes of its last meeting.
At 1744 GMT, spot gold was stable at $1,276.94 an ounce, hitting its lowest level since May 3 earlier in the day at $1,273.22.
U.S. gold futures closed up 0.1% at $1,277.30 an ounce.
Bob Haberkorn, senior market strategist at RJO Futures, said: "With the stock market falling, gold prices are expected to rise slightly before the record of the Federal Reserve Conference because the market is not expected to raise interest rates immediately for the rest of the year."
Investors turned their attention to the minutes of the Federal Reserve meeting scheduled for Wednesday, which is expected to provide more details for the central bank meeting on May 1. At that meeting, policymakers decided to keep interest rates stable and hinted that there was no willingness to adjust interest rates in the short term.
As expected interest rates fall, gold tends to appreciate because it reduces the opportunity cost of holding non-interest-bearing gold.
Stock markets around the world have been hit by growing fears that the U.S. action against Huawei in China will have more and more serious consequences. This intensifies the protracted trade war between the two major economies of the world.
The dollar's strength limits gold's appeal, as the dollar index remains at its highest level in nearly two weeks. Last week, the index recorded its biggest one-week rise since early March, supported by strong U.S. housing data and a report showing a decline in unemployment.
Although gold is a safe hedge in times of economic uncertainty, investors prefer the dollar, as they did in last year's Sino-US trade dispute.
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