Gold steadied on Tuesday after touching a six-year high as simmering tensions between Washington and Beijing propelled investors towards safe-haven assets.
Spot gold was down 0.1pc at $1,462.17 an ounce at 0951 GMT after hitting its highest since May 2013 at $1,474.81. Prices had jumped as much as 2pc in the previous session.
US gold futures were down 0.2pc at $1,474.10.
"It all comes down to the US-China situation and how it will pan out. For now, investors are repricing their expectations for when resolution is going to be achieved and many are not expecting it to happen any time soon," said SP Angel analyst Sergey Raevskiy.
"People are just rebalancing their portfolios in favour of bonds, gold, Japanese yen, Swiss francs and usual safe havens."
Global equities, meanwhile, continued their sell-off as Washington accused Beijing of currency manipulation after China let the yuan drop to its lowest in more than a decade.
The US Treasury Department on Monday said that Treasury Secretary Steven Mnuchin "will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China's latest actions".
Meanwhile, Wall Street bank Goldman Sachs said it no longer expects the United States and China to agree on a truce to end their trade dispute before the 2020 US Presidential election, citing "a harder line" taken by policymakers from the world's largest economies.
The bank's chief economist, Jan Hatzius, wrote that he expects the US Federal Reserve to cut interest rates twice more this year.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
ActivTrades analyst Carlo Alberto De Casa said the gold rally is "just the obvious consequence" of investors expecting at least another two rate cuts by the end of the year.
Interest rates futures implied that traders see a 66pc chance of the Fed cutting interest rates to at least 1.75pc to 2pc in September.
The dollar was also supporting bullion, slipping to a two-week low, while US longer-dated Treasury yields registered their biggest fall in 14 months.
Holdings of the largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, rose 0.5pc on Monday.
Among other precious metals, silver edged down by 0.2pc to $16.36 an ounce, platinum rose 0.3pc to $855.12 and palladium was up 1.6pc at $1,437.19.
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