Gold prices eased on Thursday after a sharp rise in the previous session as investors booked profits ahead of a long weekend, although softer dollar and escalating U.S.-China trade tensions kept bullion above the $3,300 per ounce level.

Spot gold slipped 0.5% to $3,326.51 an ounce as of 08:58 a.m. ET (1258 GMT), after touching a record high of $3,357.40 earlier in the session. Bullion has gained nearly 3% this week.

U.S. gold futures were down 0.2% at $3,339.90.

"Gold may have a short-term pullback given its spectacular surge this week and ahead of a rare long weekend in the markets," said Tai Wong, an independent metals trader.

"There is some risk that a trade deal could be announced over the weekend, quite possibly with Japan. However, gold's trajectory remains higher given the uncertainty and deep concern that continues to worry asset markets."

Gold prices surged 3.6% on Wednesday, driven by U.S. President Donald Trump's order to open a probe into potential tariffs on all critical mineral imports, in addition to reviews into pharmaceutical and chip imports.

Meanwhile, Trump touted "big progress" in tariff talks with Japan on Wednesday, in one of the first rounds of face-to-face negotiations since his barrage of duties on global imports roiled markets and stoked recession fears.

The dollar index (.DXY)

, opens new tab recovered on Thursday, but was still heading for a weekly fall. A weaker greenback makes gold less expensive for holders of other currencies.

"We remain bullish towards gold. That said, near-term corrections are likely to occur as tactical players take profits or perhaps experience margin calls triggered by another round of equity liquidations," consultancy Metals Focus said.

Elsewhere, spot silver fell 0.9% to $32.46 an ounce, platinum slipped 1% to $957.18, and palladium dipped 2.3% to $949.72.

Source: Reuters