Bullion plunged more than 6% at the end of daily trading on Tuesday after testing a high near $4,400 during the opening week, following the pull of the US dollar's recovery as President Donald Trump eased trade tensions with China.
At 9.10 am, gold prices were at $4,116, down 0.20% since it opened in early trading on Wednesday in the Asian session.
Market risk appetite improved and weighed on safe-haven gold as investors showed confidence amid hopes of easing trade tensions between the United States and China.
The positive news fueled expectations that US President Donald Trump's threatened 100% tariffs on all Chinese imports starting November 1 have finally been averted.
The market's calming sentiment continued to support the US dollar.
However, uncertainty remains, given Trump's unpredictable rhetoric and the fragile nature of the ongoing negotiations.
However, the broader outlook for gold remains positive despite the potential for a pullback.
Expectations of a dovish monetary policy shift by the Federal Reserve (Fed) continue to support the metal's appeal, as lower interest rates reduce the opportunity cost of holding non-yielding assets.
Meanwhile, the ongoing US government shutdown and lingering geopolitical and economic risks are helping to maintain safe-haven flows.
