Gold prices were slightly lower in European morning trade on Monday, as recent actions by U.S. President Donald Trump helped soothe investor worries about uncertainty surrounding the new administration’s controversial policies.

Gold for April delivery on the Comex division of the New York Mercantile Exchange dipped $3.90, or about 0.3%, to $1,232.00 a troy ounce by 3:15AM ET (08:15GMT).

Prices of the yellow metal rallied to a three-month high of $1,246.60 last week amid growing concerns over political risks in Europe and economic uncertainty in the U.S.

But futures pulled back as markets shifted focus back on Trump's efforts to boost economic growth after the president said his administration would be announcing "something phenomenal in terms of tax" over "the next two or three weeks" during a meeting with airline executives last Thursday.

Meanwhile, a closely watched two-day U.S.-Japan summit held over the weekend was seen to have ended smoothly, further supporting sentiment.

Trump and Japanese Prime Minister Shinzo Abe appeared to have established a quick friendship, allaying investor fears of the meeting ending acrimoniously with Trump talking tough on trade, currency and security issues.

The market's near-term focus was on Federal Reserve Chair Janet Yellen's congressional testimony scheduled for Tuesday and Wednesday. Her comments will be monitored closely for any new insight on policy and the timing of when it might raise interest rates.

Investors will also keep an eye out on a number of U.S. economic reports in the week ahead, including the January producer price index on Tuesday, the January consumer price index and retail sales on Wednesday and housing-related data on Thursday.

The Fed left borrowing costs unchanged earlier this month and gave no firm signal on the timing of its next rate hike.

Fed fund futures are pricing in a less than 15% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. However, odds of a June increase was seen at more than 65%.

The U.S. central bank has previously projected three rate increases this year. However, traders remained unconvinced, with markets continuing to price in just two rate hikes during the course of this year.