Gold fell by about 1 percent on Tuesday as signs of easing trade tensions between the U.S. and China reduced demand for safe havens, while investors are awaiting major economic data to assess Federal Reserve policy expectations.
The spot gold price fell by 0.8 percent to $3,315.84 an ounce by 2:22 PM Eastern Time (6:22 PM GMT).
U.S. gold futures settled down 0.4 percent at $3,333.6.
David Meger, director of metals trading at High Ridge Futures, said there is some optimism regarding the easing of the trade war between the U.S. and China.
Officials said that the administration of U.S. President Donald Trump plans to mitigate the impact of tariffs on cars by reducing taxes on foreign parts used in cars manufactured in the U.S. and ensuring that multiple tariffs are not imposed on imported cars.
The easing of trade tensions has led to a broad sell-off of gold, the safe haven, which is considered a traditional hedge against rising global instability, which surged in an unprecedented rally to a record high of $3,500.05 an ounce last week.
U.S. Treasury Secretary Scott Pientka said on Monday that many major trading partners have made 'very good' proposals to avoid U.S. tariffs.
Pientka added that China's recent steps to exempt some U.S. goods from its retaliatory tariffs show a willingness to ease trade tensions.
Michael Matousek, chief trader at U.S. Global Investors, said that looking at the key level in the near term, $3,500 is a suitable level for investors to enter and start liquidating their investments, which is normal in the market.
The spot silver price fell by 0.4 percent to $33.02 an ounce.
Platinum fell by about 1 percent to $976.50, and palladium dropped by 1.3 percent to $936.41.