Gold fluctuated after a two-day decline as markets remained in wait-and-see mode despite data showing improving economic sentiment and signs of progress in trade talks.

Bullion fell as much as 0.3% after earlier rising as much as 0.7%, while the dollar wavered and Treasury yields edged higher.

Investors weighed improving trade relations between Washington and Brussels. The European Union's trade chief, Maros Sefcovic, said he planned to speak with U.S. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer on Thursday, as the EU has sought to speed up negotiations to reach a deal before a July 9 deadline.

Traders were also eyeing the Federal Reserve's upcoming minutes on Wednesday, which are likely to continue to reflect officials' wait-and-see approach to monetary policy.

Gold has gained more than a quarter so far this year, though prices are currently trading about $200 below an all-time high set last month. The lingering risks continue to keep markets on edge and strengthen gold's appeal as a safe-haven asset. Investors are monitoring the U.S.'s ballooning deficit, uncertainty over global trade relations and geopolitical tensions in Ukraine and the Middle East.

Looking ahead, investors are gearing up for the Fed's preferred inflation measure, the U.S. personal consumption expenditures price index excluding food and energy, due on Friday.

Spot gold fell 0.1% to $3,298.02 an ounce as of 12:25 p.m. in New York. The Bloomberg Dollar Spot Index rose 0.3%. Silver and palladium fell, while platinum was little changed. (alg)

Source: Bloomberg