Gold prices fell on Wednesday as easing U.S.-China trade tensions soothed fears of a potential global recession, boosting investor risk appetite and weighing on bullion's safe-haven appeal.

Spot gold fell 0.4% to $3,233.69 an ounce, as of 0828 GMT. Prices scaled a record high of $3,500.05 last month amid elevated trade war fears.

"After the tariff truce announced over the weekend, we've seen stock markets surge higher, and at least in the short term, this has removed some of the safe haven focus that has helped propel gold to record highs in recent months," said Ole Hansen, head of commodity strategy at Saxo Bank.

"There's a risk of further downside if we take out that $3,200 level, then we could fairly quickly test $3,165."

Global shares have rallied amid easing Sino-U.S. trade war concerns, while also taking support from a relatively benign U.S. inflation data.

Traders now await U.S. producer price index data, due on Thursday, for cues on the Federal Reserve's interest rate trajectory after cooler-than-expected April consumer price index data fuelled speculations of possible rate cuts later this year.

The market is expecting 53 basis points of rate cuts by the Fed this year, starting in September.

While gold is traditionally viewed as a hedge against inflation, it also tends to thrive in a low-interest rate environment as it yields no interest.

Spot silver eased 0.2% to $32.83 an ounce, platinum rose 0.8% to $995.66 while palladium was steady at $957.69.

Source: Reuters