Gold slid about 2% on Thursday to its lowest level in over a month as investor appetite for the safe-haven metal decreased after a US official confirmed that Washington and China agreed to roll back tariffs as part of the first phase of a trade deal.
Spot gold was down 1.7% at $1,465.78 per ounce as of 1:43 p.m. EST (1843 GMT), having earlier slipped 2% to $1,460.75, its lowest since Oct. 1.
US gold futures settled down 1.8% at $1,466.4.
"The optimism around potential agreement or the phase one agreement is seeing some of the safe-haven flows starting to ease and some profit taking emerging on the back of that," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
"Over the past week, we saw a number of risks that were supporting gold market starting to ease, such as concerns around the trade, Brexit, and the Federal Reserve indicating a hawkish tilt. So, it is almost a delayed response with profit taking materializing."
China and the United States agreed to cancel, in phases, the tariffs imposed during their months-long trade war, the Chinese commerce ministry said earlier on Thursday. A US official confirmed the same later in the day.
Gold prices have fallen nearly 6.2% since hitting a multi-year high of $1,557 an ounce in early September.
It was also trading below its 100-day moving average of about $1,476 an ounce for the first time since May.
"Gold is in danger of breaking below its key recent range as trade optimism continues to drive a global risk-on rally move that is driving both global bond yields and the major indexes sharply higher," said Edward Moya, a senior market analyst at OANDA.
"Gold's longer-term bullish outlook should still be reasserting itself, but that might not happen until we see a major sell-off that targets the $1,450 an ounce level."
Among other precious metals, silver dipped 3.2% to $17.07 per ounce, after touching its lowest since Oct. 1 and breaking the 100-day moving average around $17 for the first time sine July.
It was en route to its biggest one-day percentage fall since late-September.
Platinum fell 1.9% to $911.20 per ounce, while palladium gained 0.6% to $1,803.46 per ounce.
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