LONDON, Apr 02 (Reuters): Gold snapped a three-session losing streak on Monday as the dollar fell and China raised tariffs on U.S. products, escalating global tensions over trade. China imposed extra tariffs of up to 25 per cent on 128 U.S. products including frozen pork, as well as wine and certain fruits and nuts, in response to U.S. duties on imports of aluminium and steel.
Spot gold added 0.6 per cent to $1,332.20 per ounce by 1050 GMT. The precious metal recorded its third straight quarter of gains on Friday. U.S. gold futures rose 0.6 per cent to $1,334.90 an ounce.
Many major financial centres were closed for Easter Monday. "Protectionism, geopolitical tensions, equities volatility and an expected spike in inflation are deemed to be the main factors pushing prices of gold," said Forextime chief market strategist Hussein Sayed.
Gold is often used as a store of value during times of financial or political uncertainty.
"With investors' trepidation likely to continue overwhelming markets, gold should remain in favour," said Stephen Innes, head of trading at OANDA, adding that gold traders would continue to take their cues from broader dollar sentiment.
The dollar index, which measures the greenback against six other major currencies, eased 0.3 per cent. A weaker dollar generally boosts the price of dollar-denominated gold.
"The trade war is going on and it is getting worse, so that might be the reason that people are selling dollar and buying gold," said Yuichi Ikemizu at ICBC Standard Bank in Tokyo. Gold fell 1.7 per cent last week in its biggest such drop since early December. But the precious metal climbed 1.7 per cent in January-March, posting its third straight quarterly gain. Hedge funds and money managers increased their net long positions in COMEX gold contracts in the week to March 27, U.S. Commodity Futures Trading Commission data showed on Friday.
Gold speculators raised their net long position by 50,996 contracts to 172,834 contracts, CFTC data showed. In other precious metals, spot silver climbed 0.8 per cent to $16.45 per ounce.Platinum rose 0.8 per cent to $935 per ounce, having fallen to its lowest since end-December in the previous session. Palladium was down 0.1 per cent at $950.55 an ounce after dropping to $938.22 on Thursday, its lowest level since Oct. 11.
"The global platinum market showed a substantial supply surplus in 2017 and is also likely to remain oversupplied in 2018," said Commerzbank, adding that therefore there is little potential for platinum to recover.
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