Gold pared gains after U.S. President Donald Trump said China was willing to resume trade talks, easing demand for the metal as a haven.

Bullion futures for December delivery advanced 0.1 per cent to US$1,539.60 an ounce at 9:34 a.m. on the Comex in New York, after surging as much as 1.8 per cent to the highest since 2013 earlier. The metal jumped Friday and global stocks plunged as the world’s two biggest economies levied tit-for-tat tariff increases.

Markets steadied Monday after Trump said China has asked to restart trade talks, and that prospects for a deal are better now than at any time since negotiations began last year. A top state-media editor in Beijing questioned his version of events. Gold has surged this year as the trade fight hurts the economic outlook, boosting odds of more U.S. rate cuts from the Federal Reserve. Low rates are a boon to gold, which doesn’t offer interest.

“The price action in gold last night was pretty indicative of just the renewed fear -- the renewed macro fear and the renewed uncertainty -- in the market,” Nicky Shiels, an analyst at Bank of Nova Scotia, said by phone Monday. With more tariffs “than any time before” currently in place or being put in place, “we would expect some sort of Fed easing in response to that, or accelerative Fed easing, should continue to support gold’s case.”

Gold will extend gains as the U.S.-China standoff harms growth, risking a deeper slowdown and inviting more central-bank easing, according to UBS Group AG, which jacked up price forecasts with a prediction the precious metal may hit $1,600 within three months.

“Gold has demonstrated its safe-haven qualities and we stay long,” Giovanni Staunovo and Wayne Gordon, analysts at UBS Group AG’s wealth-management unit, said in a report before Trump’s latest remarks.

As gold’s rally has gathered pace, investors have pushed into bullion-backed exchange-traded funds, which have reached the highest since 2013. Holdings are set for a third monthly gain, according to data compiled by Bloomberg.

--With assistance from Martin Ritchie, Ranjeetha Pakiam and Jake Lloyd-Smith.