Gold prices fell on Thursday, pulling back from one-week highs reached the session before, as risk appetite recovered after the United States expressed willingness to resolve an escalating trade fight with China. Spot gold dipped 0.6 percent to $1,324.96 per ounce by 0701 GMT, after touching a one-week high of $1,348.06 on Wednesday. US gold futures fell 0.9 percent to $1,328.50 an ounce.
"Gold ... gave up its gains after (US President Donald Trump's economic adviser) Larry Kudlow calmed fears that the trade rhetoric will escalate," said Jordan Eliseo, chief economist at gold trader ABC Bullion. The United States voiced willingness on Wednesday to discuss with China after Beijing retaliated against proposed US tariffs on $50 billion in Chinese goods by targeting key American imports.
As investors pulled out of gold, the dollar gained and Asian equities rebounded from two-month lows. Gold's drop shows traders were "liquidating profits and opportunists taking advantage of the market on a short-term basis," said Joshua Rotbart, managing partner of J. Rotbart & Co in Hong Kong. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were largely steady at 852.03 tonnes on Wednesday compared with 852.31 tonnes on Tuesday.