Gold eased to hit its lowest level in two weeks on Thursday as the dollar's strength and easing trade tensions dulled the metal's safe-haven allure, while investors awaited the U.S. non-farm payrolls report.

Spot gold was down 1.6% at $3,235.55 an ounce as of 0629 GMT, after hitting its lowest level since mid-April.

The dollar (.DXY), opens new tab rose 0.4% against its peers, making bullion more expensive for overseas buyers.

U.S. President Donald Trump said he has "potential" trade deals with India, South Korea and Japan as he sought to convert his tariff policy into trade agreements.

"Gold retraced as trade war concerns eased, but market confidence remains shaky with investors reacting to headlines daily," said Ilya Spivak, head of global macro at Tastylive.

The non-yielding metal, considered a hedge against political and financial turmoil and tends to thrive in a low interest rate environment, scaled multiple record peaks in April due to elevated uncertainties.

"The Federal Reserve's dovish policy outlook could support gold, but it may need to unwind more of the April panic first," Spivak added.

The U.S. economy contracted for the first time in three years in the first quarter of fiscal 2025, as businesses rushed to import goods ahead of Trump's expected tariffs.

Clearer signs of a faltering economy by June will move the Fed to resume cutting rates, ultimately by a full percentage point by end-2025, traders bet on Wednesday.

The market is now waiting for the non-farm payrolls report on Friday for more cues on the Fed's policy path.

China's stock and bond markets, foreign exchange and commodity futures markets will be closed from May 1-5 for the Chinese Labour Day holiday.

Spot silver fell 1.5% to $32.10 an ounce, platinum shed 1% to $957.33 and palladium rose 0.2% to $939.74

Source: Reuters