Gold prices declined more than 1% on Tuesday as the dollar's reversal to trade higher added to the pressure on the safe-haven asset following U.S. President Donald Trump's less aggressive trade stance towards the European Union.

Spot gold was down 1.6% at $3,289.93 an ounce as of 1155 GMT. U.S. gold futures fell 2.3% to $3,287.80.

Prices had softened on Monday as well after Trump, on Sunday, retreated from his threat to impose new tariffs on the European Union next month, instead reinstating a July 9 deadline for trade negotiations.

"Gold trades lower for a second day with technical selling along a descending trendline ... from the April record high, being supported by reduced haven demand amid rising stocks after Trump softened his aggressive trade stance with the EU," said Ole Hansen, head of commodity strategy at Saxo Bank.

The U.S. dollar index (.DXY), opens new tab reversed earlier declines to trade 0.3% higher, making greenback-priced gold more expensive for overseas buyers.

Market participants also await speeches from several Federal Reserve policymakers this week and Friday's U.S. inflation (core PCE) data to gauge the central bank's rate cut trajectory. Lower rates increase non-yielding bullion's appeal.

"Gold traders will be watching incoming U.S. economic data for signs of a tariff-related slowdown and/or a pick up in inflation," Hansen added.

Investors are currently anticipating 47 basis points worth of rate cuts by the end of this year, starting in October.

"The shorter term outlook is unchanged: gold is still consolidating. We expect prices to remain supported while the markets contend with continued uncertainty, but we believe that the high is in," StoneX analyst Rhona O'Connell said in a note.

Elsewhere, spot silver slipped 1.4% to $32.88 per ounce, platinum fell 1.1% to $1,073.22 and palladium dropped 1.3% to $974.50.

Source: Reuters