Gold falls as dollar firms after China halts trade talks

US gold futures were virtually unchanged at $1,200.60 an ounce. Liquidity is expected to be thin during Asian hours as markets in Japan and China are closed for a holiday.

"The news out of China does seem to be having some negative impact (on gold) with the US dollar cautiously higher and gold a bit lower by extension," said Ilya Spivak, a currency strategist for Dailyfx.

"The moves are relatively tepid because much of what is happening was telegraphed earlier and is already priced in to some degree," Spivak said.

Last week, China added $60 billion of US products to its import tariff list, retaliating against US duties on $200 billion of Chinese goods that come into effect on Monday.

Although gold is generally considered to be a safe-haven asset, the months-long trade rift between Washington and Beijing has prompted investors to buy US dollars in the belief that the United States has less to lose from the dispute.

The dollar rose 0.1 percent against a basket of currencies at 94.276.

Gold has fallen over 12 percent since a peak in April amid the intensifying trade disputes and as rising US interest rates diminish demand for non-interest bearing bullion.

Investors are awaiting this week's Federal Reserve meeting, where the US central bank is widely expected to raise benchmark interest rates and shed light on the path for future rate hikes.

"Gold traditionally trades poorly ahead of anticipated Fed hike and the dollar will have up ground," said Stephen Innes, APAC trading head at OANDA.

Meanwhile, speculators increased their net short position in COMEX gold contracts in the week to Sept. 18, US data showed on Friday.

Among other precious metals, spot silver was down 0.4 percent at $14.19. Platinum fell 0.5 percent to $822.10, after hitting its highest in six weeks at $838.40 on Friday.

Palladium fell 0.6 percent to $1,042.65, after hitting five-month highs at $1,056.72 in previous session.