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Gold prices dropped more than 1% on Monday as easing U.S.-China trade tensions boosted investors' risk appetite and dented demand for safe-haven assets such as bullion, while a stronger dollar also piled on the pressure.

Spot gold was down 1.4% at $3,272.89 an ounce, as of 0220 GMT. Bullion hit a record high of $3,500.05 on April 22.

U.S. gold futures eased 0.4% to $3,283.70.

The U.S. dollar rose 0.3% against a basket of currencies, making bullion more expensive for overseas buyers.[USD/]

"It's probably fair to say that financial markets and risk-assets in particular are feeling slightly better about the tariff picture now compared to the frantic first week in April," said Tim Waterer, chief market analyst at KCM Trade. [MKTS/GLOB]

"Comments last week from the White House have fuelled optimism that a U.S.-China trade deal may eventuate, which has caused safe haven demand for assets such as gold to subside."

U.S. President Donald Trump has said talks on tariffs were taking place with China.

The Trump administration signalled openness last week to de-escalating a trade war between the world's two largest economies that has raised fears of recession.

On Friday, China exempted some U.S. imports from its steep tariffs, though China quickly knocked down Trump's assertion that negotiations were underway.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low interest rate environment.

Meanwhile, many participants in the International Monetary Fund and World Bank Spring Meetings said Trump's administration was still conflicted in its demands from trading partners hit with his sweeping tariffs.

Key data releases this week include the job openings report on Tuesday, U.S. Personal Consumption Expenditures on Wednesday, and the non-farm payrolls report on Friday. These reports may provide more insight into the Federal Reserve's monetary policy outlook.

Among other metals, spot silver dropped 1.2% to $32.70 an ounce, platinum eased 0.6% at $965.70 and palladium lost 1% to $939.00.

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