Gold falls as traders watch US-China trade talks in London

U.S. President Donald Trump said his administration was "doing well" in the negotiations and noted positive reports from the talks.

Last month, both sides agreed to a temporary pause tariffs, offering some relief to financial markets.

"If traders come away from the U.S.-China talks this week thinking that the two nations remain on track to achieve a broader trade deal, safe-haven demand for assets such as gold could ease."

Data from China showed export growth slowed to a three-month low in May as U.S. tariffs impacted shipments, while factory-gate deflation worsened to its deepest level in two years.

Meanwhile, investors are now awaiting U.S. inflation data on Wednesday for more cues on the Federal Reserve’s monetary policy path.

"If CPI has ticked marginally higher that would be an expected result, but if it jumps then that could raise some alarm bells for investors, and any resulting flight to safety could help the gold price," Waterer said.

Gold gains appeal during uncertain geopolitical and economic times and tends to do well when interest rates are low.

Elsewhere, spot silver was down 0.6% to $36.51 per ounce, platinum dropped 0.8% to $1,210.46, while palladium fell 0.2% to $1,071.75.