Gold slipped for the second time in three days as investors assessed easing tensions in trade talks between Washington and Beijing, alongside softer-than-expected U.S. inflation data.

The precious metal dropped as much as 0.9% early in the session before paring losses. Reports of U.S.–South Korea discussions on currency policy also contributed to a weaker dollar.

The sharpest drop came on Monday after news of a trade truce sparked a shift away from safe-haven assets.

“Tariff rates came in much lower than expected, easing concerns over trade-related economic risks,” said Justin Lin, an analyst at Global X ETFs. He noted that capital is flowing out of defensive assets like gold.

A weekend meeting in Switzerland between U.S. and Chinese officials revived risk appetite, helping the S&P 500 recover all its losses for the year.

Despite the correction, gold remains up roughly 20% in 2025, having topped $3,500 an ounce last month during peak trade uncertainty.

Tuesday’s U.S. inflation data for April came in weaker than forecast, suggesting limited pressure on businesses to pass tariff costs to consumers — potentially strengthening the case for Fed rate cuts.

In early London trading, spot gold dropped 0.6% to $3,232.50 per ounce. The Bloomberg Dollar Spot Index also slipped 0.4%. Silver edged lower, while platinum and palladium gained.