Gold prices fell in European trade on Tuesday, resuming losses and approaching a week low once more under pressure from the stronger US dollar.
The decline comes after signals about progress in the US-China trade talks in London, which entered its second day.
Now the markets await crucial US inflation data for May to gather clues about the odds of Fed rate cuts later this year.
Prices
Gold prices fell 0.7% to $3302 an ounce, with a session-high at $3333.
On Monday, the precious metal rose 0.45%, the first profit in three days away from a week low at $3293.
US Dollar
The US dollar rose 0.25% on Tuesday and approached a two-week high against a basket of major rivals.
It comes amid concerns about an economic slowdown in the US and China receded with both sides conducting important talks in London for a second day.
Trade Talks
High-level talks between US and Chinese officials commenced this week in London, with the hopes of reaching some sort of an initial agreement on tariffs and trade.
It comes after the Trump-Xi phone call which was described as “very positive” and paved the way for deeper communication.
Trump adviser Kevin Hassett said that reducing US chip exports restrictions could be discussed, and in return, China would accelerate shipments of rare-earth minerals.
According to the Wall Street Journal, Trump allowed his chief negotiator, Treasury Secretary Scott Bessent to set limits on tech sales and readjust export restrictions.
US Rates
According to the Fedwatch tool, the odds of a 0.25% Fed June rate cut stood at just 1%, and at 17% for a July rate cut.
According to the London Securities Exchange data, traders now expect 50 basis points of US interest rate cuts overall this year, likely starting in October.
SPDR
Gold holdings at the SPDR Gold Trust rose 2.01 tons yesterday to a total of 936.22 tons, the highest since 13.
