Gold falls more than 1% as U.S.-China trade truce dents safe-haven demand

Gold fell more than 1% on Monday to its lowest in more than a week as the dollar strengthened and investors opted for riskier assets after the United States and China agreed to restart trade talks.

Spot gold was down 1.3% at $1,391.29 per ounce as of 0411 GMT, after falling to as low as $1,389.65, its lowest since June 21.

U.S. gold futures dipped 1.3% to $1,394.90 an ounce.

"Reopening of trade talks between U.S.-China has made investors look back at growth, we are seeing good support for the share markets across the region and safe-havens are in less demand," said Michael McCarthy, chief market strategist, CMC Markets.

"We are likely to see increased volatility. Gold prices have pulled back from an important technical level of around $1,430, that could mean that we will see a test at support around the $1,380 mark."

Gold rose to $1,438.63 an ounce on June 25, its highest since May 14, 2013, as the U.S. dollar weakened and as investors sought safe-haven assets on concerns about the escalation of the nuclear dispute between the United States and Iran.

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