Gold prices traded slightly lower on Friday in Asia as reports that the U.S. is considering easing tariffs on Chinese products raised the mood toward risk assets and damped demand for safe havens.
Increasing hopes that a 'hard Brexit' scenario can be avoided were also cited as a headwind for the precious metal.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange were down 0.1% to $1,291.65 a troy ounce by 1:50 AM ET (06:50 GMT).
On Thursday, the Wall Street Journal reported that U.S. Treasury Secretary Steven Mnuchin proposed easing China tariffs.
Citing people with knowledge to the matter, the report said Mnuchin is a proponent of easing tariffs, but Trade Representative Robert Lighthizer is concerned the move would be seen as a sign of weakness.
The report sent global stocks higher, while the safe-haven gold slipped, even after the Treasury Department quickly denied the news.
The U.S. is due to raise tariffs on a further $200 billion of Chinese imports in March unless the two countries can resolve their differences on trade. The recent impasse has supported gold, considered a safe-haven in times of geopolitical tension.
Meanwhile, U.K. Prime Minister Theresa May's victory on Wednesday against a no-confidence vote led analysts to speculate that the risk of the U.K. exiting the European Union without a deal had diminished.
That came one day after her Brexit plan was rejected a day earlier by the U.K. parliament in a record-breaking defeat. May plans to hold a parliamentary vote on her Brexit “Plan B” on Jan. 29.
The U.S. dollar index that tracks the greenback against a basket of other currencies was unchanged at 95.715.
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