Gold prices dropped on Wednesday, pressured by a firmer dollar and easing trade tensions, while investors awaited key U.S. data this week for insights into the Federal Reserve's rate outlook.

Spot gold fell 0.3% to $3,306.18 an ounce as of 0624 GMT. The metal was on track to log its fourth consecutive monthly gain, rising nearly 6% so far in April.

There's been a minor recovery in the broad dollar strength, which led to a little bit of retracement in gold, said Nicholas Frappell, global head of institutional markets at ABC Refinery.

U.S. President Donald Trump signed a pair of orders to soften the blow of his auto tariffs on Tuesday, while his trade team touted its first deal with a foreign trading partner.

"Even though the Trump administration is watering down tariffs, they are still high and the confidence in U.S. assets has been shaken, arguably permanently," Capital.com's financial market analyst Kyle Rodda said.

Bullion, a safeguard against political and financial turmoil, last soared to a record high of $3,500.05 per ounce on April 22 as investors sought refuge from global economic turmoil.

Market participants will scan economic data, including U.S. personal consumption expenditures (PCE) later in the day and non-farm payrolls report on Friday, to further gauge the impact of the latest tariffs on the Fed's interest rate outlook.

"The PCE data is expected to show further moderation in prices and keep the door open for further Fed cuts. If we get an upside surprise, then those odds may diminish and that could weigh on gold prices," Rodda said.

Traders currently expect the Fed to cut rates by around 95 basis points by the end of the year.

Spot silver fell 0.3% to $32.87 an ounce, platinum eased 0.1% to $975.95 and palladium lost 0.2% to $932.87.

Source: Reuters