Gold prices were flat on Thursday even though the US dollar rally lost steam, as safe haven bids for bullion declined after political tensions in Italy eased, which also lifted the euro.
"The situation in Italy is fading. We're not seeing much of a safe haven bid for gold," said Chris Gaffney, president of world markets at EverBank.
Italy's two anti-establishment parties renewed attempts to form a government and avoid snap elections that investors fear would serve as a quasi-referendum on Rome's membership of the euro zone.
Spot gold was flat at $1,300.66 ounce by 2:07 p.m. EDT (1807 GMT). It was down nearly 1 percent for the month, headed for its second straight monthly decline.
US gold futures for June delivery were also essentially flat, settling down just $1.40, or 0.1 percent, at $1,300.10 per ounce.
Gold got an early boost as the dollar fell for a second day versus the euro, making dollar-priced gold cheaper for non-US investors. Italian bonds and European equities posted a second day of gains.
Escalating trade tensions also supported gold, traders said.
Washington will announce plans to slap tariffs on EU steel and aluminum imports, sources said. The EU has said it does not want a trade war but will respond if Washington imposes tariffs.
China said on Wednesday it was ready to fight back if Washington was looking for a trade war.
Tariffs "would definitely reduce risk appetite, and gold will benefit from this," said Bart Melek, head of commodity strategy at TD Securities.
Meanwhile, spot silver declined 0.3 percent at $16.46 an ounce, but was on track for a monthly rise of about 1 percent, its biggest since January.
Platinum gained 0.1 percent at $907.40 per ounce, headed for a 0.5 percent monthly increase.
Palladium increased 0.2 percent at $987.50 an ounce and was headed for its biggest monthly gain since December, climbing over 2 percent.
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