Gold prices declined for a second consecutive session on Tuesday, as risk sentiment improved following US President Donald Trump's decision to postpone tariffs on the European Union, reports Reuters.
Spot gold fell 1.4 per cent to $3,296.79 an ounce by 0901 ET (1301 GMT) after rising nearly 5 per cent last week. US gold futures lost 2.1 per cent to $3,296.10. "There is a lot of volatility in gold prices as we keep having things change on the tariff front. Currently, the market may be under the impression that there is a deal to be had and that is pressuring gold," Bart Melek, head of commodity strategies at TD Securities, said.
A weekend telephone call between Trump and EU chief Ursula von der Leyen gave 'new impetus' to trade talks, the EU said, after Trump dropped his threat to impose 50 per cent tariffs on imports from the European Union next month.
The US dollar strengthened and stock index futures surged. A stronger dollar and rising risk sentiment weighed on gold, a dollar-denominated asset typically favoured during periods of economic and geopolitical uncertainty.
Federal Reserve Bank of Minneapolis President Neel Kashkari called for keeping interest rates steady until there is more clarity on how higher tariffs affect inflation.
The minutes from the Fed's latest policy meeting are set to be released on Wednesday. Key US economic data scheduled for release this week include the first-quarter GDP estimate, weekly unemployment claims, and the core PCE price index.
"Our longer term bullish view on gold has not changed. As soon as the market believes that the Fed is going to cut (rates), gold will start doing well," Melek added.
Zero-yield bullion tends to do well in a low-interest rate environment.
Elsewhere, spot silver slipped 1.2 per cent to $32.96 per ounce, platinum fell 0.2 per cent to $1,082.63 and palladium eased 0.3 per cent to $984.50.
