Gold dipped to a more than five-week low in early trade in New York on Monday as optimism about a possible trade deal between the United States and China helped whet risk appetite, while platinum shed 3 percent.
The world's two largest economies appeared close to a deal that would roll back US tariffs on at least $200 billion worth of Chinese goods and possibly end their long-drawn trade spat, a source briefed on negotiations said on Sunday.
Spot gold was down 0.5 percent at $1,286.63 per ounce at 11:39 a.m. EST (1639 GMT), after falling to $1,282.50 earlier in the session, its lowest since Jan. 25.
The precious metal slipped below a key level of $1,300 on Friday.
Meanwhile, US gold futures shed 0.8 percent to $1,288.30 per ounce and were set to fall for a sixth consecutive session.
"There is a risk-on (sentiment) in the markets with the positive US-China talk, so gold is naturally pulling back on strong equities, strong dollar and good geopolitical news," said Bob Haberkorn, senior market strategist at RJO Futures.
US President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27, given progress in talks between the two countries, the Wall Street Journal reported on Sunday.
Global markets cheered a potential deal, indicating improved demand for riskier assets, in turn dampening demand for gold.
"It seems that investors' appetite for gold has suddenly vanished," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Indicative of sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.5 percent on Friday, their biggest one-day percentage fall since December 2016.
Amongst other precious metals, platinum shed 3 percent to $830 an ounce while palladium was down about 1 percent at $1,530.05 per ounce.
Bank of America Merrill Lynch lifted its forecast for palladium, expecting it to hit a key $2,000 level this year. The bank said it expects platinum prices to average $883 for the same period.
Earlier in the session, palladium rose to $1,560, within striking distance of an all-time peak of $1,565.09 scaled on Feb. 26 due to a sustained deficit for the autocatalyst metal.
Silver declined to a more than two-month low of $15.02 an ounce, and last traded 0.8 percent lower at $15.09.