Gold prices extended losses on Tuesday to a near three-week low, as optimism over a potential U.S.-China trade deal dented demand for safe-haven bullion, while investors looked forward to major central bank policy announcements this week.
Spot gold was down 1.5% at $3,923 per ounce, hitting its lowest level since October 10.
Gold Fields fell 6%; Harmony Gold fell 5%; Coeur Mining, Kinross, and Newmont fell 3%.
"A de-frosting of U.S.-China trade relations has somewhat pulled the rug out from under the gold price due to a decline in safe-haven buying flows," said KCM Trade Chief Market Analyst Tim Waterer.
On Sunday, top Chinese and U.S. economic officials hashed out the framework of a trade deal for U.S. President Donald Trump and his Chinese counterpart Xi Jinping to decide on later this week.
"If Trump and Xi have a productive meeting on trade this week, this could leave gold swimming against the current to some degree. But this could be offset if the Fed delivers a dovish tone with the expected rate cut this week," Waterer said.
Trump said he thought a deal would be reached with China, and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations during the first stop of his five-day Asia trip.
Asian shares consolidated recent hefty gains on Tuesday as hopes for a thawing in global trade tensions kept risk appetite keen.
With the U.S. Federal Reserve widely expected to cut interest rates at the end of its policy meeting on Wednesday, investors are awaiting any forward-looking language from Fed Chair Jerome Powell.
Meanwhile, the European Central Bank and the Bank of Japan are both broadly expected to hold rates steady later this week.
Gold prices have gained about 53% this year, reaching an all-time peak of $4,381.21 on October 20, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.