Gold fell for a third day on signs of progress in potential trade talks between the US and China, denting demand for safe havens.

Bullion prices fell as much as 0.6% to trade near $3,275 an ounce. State-run China Central Television said the US had contacted Beijing through multiple channels. News that the Trump administration was close to announcing the first phase of a deal that would roll back planned tariffs on some countries also eased some concerns about the outlook for global trade.

On Wednesday, the precious metal slid further from a record high hit last week, even after data showed the US economy contracted at the start of the year for the first time since 2022 on a monumental pre-tariff surge in imports. The contraction has traders raising bets on further US monetary easing, with four quarter-point interest rate cuts now priced in this year by the Federal Reserve to help stave off a recession.

Lower interest rates are usually positive for bullion because it does not pay interest. Gold has gained about 25% this year, driven largely by investors seeking refuge in the safe-haven asset as U.S. President Donald Trump's rapidly evolving trade policies upended markets and stoked fears of a global slowdown.

The rally has also been supported by inflows into bullion-backed exchange-traded funds, central bank buying and signs of strong speculative demand in China, even as physical consumption in the world's biggest buyer has slumped. Looking ahead, a key U.S. jobs report due on Friday could shed light on the initial impact of Trump's trade policies on the economy. Spot gold fell 0.5% to $3,273.40 an ounce as of 8:05 a.m. in Singapore. The Bloomberg Dollar Spot Index edged up. Silver and platinum were little changed, while palladium was slightly lower.

Source: Bloomberg