Gold prices fell more than 1% on Tuesday, as optimism over a trade deal between the U.S. and its trading partners weighed on safe-haven flows, with a stronger U.S. dollar and rising Treasury yields adding further pressure.

Spot gold fell 0.8% to $3,307.16 an ounce, as of 1:49 p.m. EDT (1749 GMT), after hitting its lowest in more than a week earlier in the session. U.S. gold futures settled 0.8% lower at $3,316.9.

The benchmark 10-year Treasury yield hit its highest in more than two weeks, making non-yielding bullion less attractive, while the dollar, opens new tab , edged up 0.1%. Asia's strongest economies, Japan and South Korea, said on Tuesday they would try to negotiate with the U.S. to ease the impact of much higher tariffs that President Donald Trump now plans to impose in early August.

Trump revived his trade war on Monday, warning 14 countries they would face higher tariffs. But with the start date pushed back to Aug. 1, countries are focusing on a new three-week window to press for an easing of the situation.

"The focus is on trade as the July 9 deadline approaches, with the Trump administration ramping up the pressure. However, some optimism about a trade deal is fueling risk sentiment, which is keeping gold subdued," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Meanwhile, the market is awaiting the minutes of the U.S. Federal Reserve's latest policy meeting due on Wednesday with several Fed officials due to speak this week for more insight into the economy and the central bank's policy path.

"The lingering threat of inflation from tariffs may persuade the Fed to delay rate cuts until next year and this will cap gold prices," said Hamad Hussain, climate and commodities economist at Capital Economics. Investors are currently pricing in a 50 basis point Fed rate cut by the end of this year, starting in October.

Spot silver fell 0.3% to $36.64 an ounce, platinum fell 0.8% to $1,359.90, while palladium was steady at $1,111.36. (alg)

Source: Reuters