Gold fell on Wednesday, retreating from a two-week high hit earlier in the session, after the United States started issuing licenses for some companies to supply goods to Chinese firm Huawei, rekindling hopes for trade negotiations that had shown signs of turning more contentious.
Spot gold dipped 0.3% to $1,468.14 per ounce as of 11:17 a.m. ET (1619 GMT), having touched a two-week high of $1,478.80 earlier.
US gold futures dropped 0.4% to $1,468.40.
The US Commerce Department confirmed it has begun issuing licenses for some U.S companies to supply non-sensitive goods to Huawei.
"The announcement seems to be the proximate trigger for gold's stumble," said Tai Wong, head of base and precious metals derivatives trading at BMO.
"Gold price action lately has been nearly formulaic: the market starts to lean one way, gets disappointed in the price action, and a contrary headline gives it a shove in the opposite direction."
The mood in markets had been sour after the US Senate angered China by passing a bill requiring annual certification of Hong Kong's autonomy and warning Beijing against violently suppressing protesters. China demanded the United States stop interfering in its internal affairs and said it would retaliate.
US President Donald Trump also threatened to raise tariffs on Chinese goods if a trade deal is not reached soon.
"Every time there are talks about trade discussions, you see this knee jerk reaction (in gold)... I am surprised gold is not getting much of a boost (from lower equities). It must be in preparation for the Fed minutes," said Phillip Streible, senior commodities strategist at RJO Futures.
Focus now turns to the release of minutes from the Fed's most recent policy meeting. The central bank cut interest rates for the third time this year in October.
Elsewhere, silver eased 0.4% to $17.07 an ounce, while platinum gained 0.5% to $914.77. Palladium was up 0.5% to $1,770.92 an ounce.