Gold fell on Tuesday as softening trade tensions between the U.S. and its trading partners dulled the metal's safe-haven appeal, while investors awaited U.S. economic data to assess the Federal Reserve's policy path.

Gold fell further from last week’s record high as easing trade tensions instill new risk appetite into global markets.

Gold retreated sharply from an all-time high in the past week as risk-aversion sentiment abated following Trump’s softened tone on China tariffs. While the price drop may continue in the near term, analysts expect gold to extend its long-term rally due to ongoing uncertainties.

The dollar barely recouped its heavy losses on Tuesday as investors were no clearer on whether a de-escalation of the Sino-U.S. trade war was underway, with Treasury Secretary Scott Bessent suggesting the onus was on China to start negotiations.

Beijing appears to be bedding in for a protracted battle with the US over tariffs. The Chinese government laid out policies Monday to aid its exporters affected by the trade war, including loan support for troubled firms and measures to further boost domestic consumption.

China on Monday said it was on the right side of history in its gruelling trade war with the United States. Recall that the US President Donald Trump, since returning to the presidency in January, has imposed 10 per cent tariffs on most US trading partners and a separate 145 per cent levy on many products from China.