Gold prices dipped on Thursday as the dollar inched higher to a near one-week high, while investors waited on any Sino-U.S. trade developments later this week in Japan.
Spot gold was down 0.4% at $1,402.09 per ounce as of 0654 GMT, after shedding more than 1% in the previous session.
U.S. gold futures slipped 0.6% to $1,406.30 an ounce.
"There appears to be some fatigue around preannouncements on the trade issues... If we don't see any sort of agreement, then we can see support for gold coming back, but in the meantime that modulation is expected to weigh on gold prices," said Michael McCarthy, chief market strategist, CMC Markets.
"This looks like a corrective action at the moment," he said, adding that a slight uptick in the dollar was also pressuring gold prices.
The dollar edged up to its highest since June 21 as some of the jitters ahead of the G20 summit in Japan eased amid hopes for progress there in resolving the Sino-U.S. trade war. [USD/]
The South China Morning Post, citing sources, said Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.
On Wednesday, U.S. President Donald Trump said a trade deal with Chinese President Xi Jinping was possible this weekend but warned he was prepared to impose U.S. tariffs on virtually all remaining Chinese imports if talks fail.
Trump raised the possibility that he may impose a lower, 10% duty on a $300 billion list of Chinese imports, instead of the proposed 25% rate.
He also weighed into U.S. monetary policy, accusing Fed Chairman Jerome Powell of doing a "bad job" and "out to prove how tough he is" by not cutting interest rates.
This comes after Powell said the central bank was "insulated from short-term political pressures," pushing back against Trump's demand for a significant rate cut.
"Even though the Fed has hinted at an upcoming rate cut, the comments of 50 basis points being too much could end up with the central bank holding rates steady if economic indicators rebound in the short term," Alfonso Esparza, a senior market analyst at OANDA, said in a note.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22% to 797.85 tonnes on Wednesday.
On the technical side, spot gold may stabilise around a support at $1,404 per ounce, and bounce towards a resistance at $1,421, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver fell 0.4% to $15.18 per ounce and platinum eased 0.4% to $811.13.
Palladium was down 0.2% at $1,519.10 an ounce.