Gold prices fell to their lowest level in a week on Monday after US and China expressed their desire to sign a preliminary trade agreement by the end of the year, boosting the demand for high-risk assets and support the dollar.
Spot gold transactions fell 0.1% to $ 1460.85 an ounce, after falling to its lowest level since November 18 earlier in the session. US gold futures fell 0.2% to $ 1,460.80 an ounce.
Positive news about trade talks between Washington and Beijing helped Asian stocks recover, while the dollar rallied against a basket of rivals, raising the cost of the yellow metal, which does not yield to holders of other currencies.
The greenback rose strongly on Friday after a survey showed that US manufacturing output accelerated in November and that service sector activity increased more-than-expected.
Gold is considered a safe haven in times of political and economic uncertainty, and has risen more than 13% since the beginning of this year, mainly due to the long-standing tariff dispute and concerns about slowing global growth.
"Trade optimism is driving global equities higher and capital away from safe havens into riskier assets," said Margaret Yang Yan, market analyst at CMC Markets.
