Gold prices pared gains at $4,800, retreating from record highs after US President Donald Trump withdrew his threat to European tariffs and announced a framework agreement on Greenland.
At 9 a.m., gold prices were at $4,787, down 0.95% since opening in early Asian trading Thursday.
Bloomberg reported on Wednesday that US President Donald Trump had indicated his willingness to withdraw plans to impose tariffs on goods from European countries that oppose his bid to take over Greenland.
The development followed claims that the United States and the North Atlantic Treaty Organization (NATO) had formed a framework for a future agreement on Greenland.
Hopes for a diplomatic solution to the issue are seen as potentially dampening demand for traditional safe-haven assets such as gold in the near term.
However, long-term sentiment for the precious metal remains supported by expectations of lower interest rates, ongoing geopolitical tensions and strong buying by central banks.
Trump has not yet detailed the content or parameters of the intended framework agreement, raising uncertainty about the actual direction of the negotiations.
German Finance Minister Lars Klingbeil also warned against over-optimism following the withdrawal of the tariff threat previously used as pressure over Greenland. Any resurgence of tensions between the United States and the European Union could support gold prices.
Meanwhile, markets are focused on key US economic data releases, including the final third-quarter Gross Domestic Product (GDP), initial jobless claims and Personal Consumption Expenditures (PCE) data due later on Thursday.
Weaker-than-expected data could weigh on the US dollar and support dollar-denominated commodity prices.
