Gold remained in the red on Friday after the U.S. began collecting tariffs on $34 billion in Chinese goods.

Comex gold futures for August delivery slipped 0.2% to $1,256.40 a troy ounce as of 1:31 AM ET (05:31 GMT).

U.S. President Donald Trump's initial round of tariffs on China came into effect at 12:01AM ET (04:01 GMT) today. Further, Trump told reporters that another $16 billion are expected to go into effect in two weeks, and that he is considering to impose additional tariffs on $500 billion in Chinese goods if Beijing retaliate.

Chinese officials have said earlier that it would retaliate against Trump’s tariffs on Chinese goods, while a state-owned newspaper accused the U.S. of “blackmail” and “racketeering”.

Meanwhile, the U.S. Dollar Index, which tracks the greenback against at basket of six major currencies, was down 0.02% at 94.11 on Friday after slipping to 94.177, its lowest since June 26, the previous day.

U.S. central bankers expressed concerns on global trade tensions during minutes of the Federal Reserve’s last policy meeting on June 12-13 on Thursday.

"Most (Fed policymakers) noted that uncertainty and risks associated with trade policy had intensified and were concerned that such uncertainty and risks eventually could have negative effects," according to the minutes.

“I take the view the Fed will take a modestly dovish line while trade tariff uncertainties persist. Gold is oversold, so I expect it to rally somewhat while interest rate expectations soften, perhaps to one more instead of two quarter point increases this year,” said Alasdair Macleod, head of research with Toronto-based Goldmoney Inc.

Gold prices are highly sensitive to expectations of higher interest rates as the previous does not pay interest and usually struggle with yield-bearing assets when rates rise.