Investing.com – Gold prices gained on Monday on a softer dollar and threat of a full-blown trade war after US tariffs on $34 billion worth of Chinese goods took effect on Friday, while China's commerce ministry retaliated with 25% tariffs on $34 billion worth of US imports.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange gained 0.32% to $1,259.80 a troy ounce by 1:30AM ET (05:30 GMT).
The U.S. Dollar Index, which tracks the greenback against a basket of six major currencies, fell 0.15% to 93.62.
The dollar fell on Friday after data showed the US unemployment rate increased and wages grew less than forecast in June even as the economy created more jobs than expected.
The data showed average U.S. hourly earnings gained five cents, or 0.2% in June after increasing 0.3% in May.
Meanwhile, nonfarm payrolls rise by a stronger-than-expected 213,000 in June, although its impact on currencies and gold seem to be limited.
A weak US dollar tends to lift gold, making the greenback-priced metal cheaper for non-US investors.
"Traders are extremely cautious when it comes to gold. The intraday price-action has a bullish set-up and shows that the price has potential to test the level of $1US,280 in the coming days if the dollar weakness continues," ThinkMarkets chief market analyst Naeem Aslam said.
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