Gold held a small decline as demand for haven assets cooled, with investors weighing prospects for improving trade relations between the US and the EU.
Bullion traded near US$3,347 an ounce, following a 0.4% loss on Monday, after Brussels said it would accelerate negotiations with Washington to avoid a trans-Atlantic trade war. Both sides have softened their approach after US President Donald Trump initially criticised the bloc for dragging its feet on talks.
Demand for safe assets like gold has been impacted as signs emerge that the White House may be making progress in negotiations with some trading partners. Gold-backed exchange-traded funds registered five straight weeks of outflows since peaking at the highest in more than a year in mid-April, according to Bloomberg calculations.
But markets remain in wait-and-see mode, weighing a number of risks including the swelling US deficit, ongoing trade talks and worsening conflicts in the Middle East and Ukraine.
Gold has advanced by more than a quarter this year though prices are currently trading about US$165 below an all-time-high set last month. Citigroup reverted to a short-term call for US$3,500 per ounce on Monday, reinforcing its haven status amid fresh trade and geopolitical risks.
Investors are also gearing up for the US Federal Reserve’s preferred inflation measure, the US personal consumption expenditures price index excluding food and energy, which will be released Friday.
See also: Gold edges lower on stronger dollar ahead of US labour figures
Spot gold was up 0.1% to US$3,344.65 an ounce as of 7.56am in Singapore. The Bloomberg Dollar Spot Index was steady. Platinum extended declines after last week reaching the highest level in two years on signs of market tightness. Silver edged lower and palladium was little changed.
