Gold prices fell to their lowest level in over a month on Thursday as investors turned cautious ahead of crucial U.S. inflation data, which could provide fresh insights into the Federal Reserve’s monetary policy outlook. Improving U.S.-China trade relations also dampened gold’s safe-haven appeal.

Spot gold declined 1.3% to USD 3,136.97 an ounce as of 05:36 GMT, hitting its lowest point since April 10 earlier in the session. U.S. gold futures also slipped, down 1.5% to USD 3,140.00.

The pullback comes amid a notable de-escalation in U.S.-China trade tensions, with both countries agreeing to significantly reduce tariffs and implement a 90-day pause in their ongoing trade dispute.

“The intraday outlook remains bearish for gold, driven by the improving tone in U.S.-China relations, which has reduced demand for safe-haven assets,” said Jigar Trivedi, senior commodity analyst at Reliance Securities. “A rebound in the U.S. dollar, along with potentially stronger retail sales and producer price index (PPI) data, could further pressure gold prices.”

Investor focus is squarely on the U.S. PPI report due at 12:30 GMT, following weaker-than-expected consumer inflation figures released earlier this week.

Meanwhile, the Federal Reserve has maintained its current interest rate stance as it assesses the impact of tariffs and trade policy on the broader economy. Market participants will also be closely watching Fed Chair Jerome Powell’s speech later in the day for additional guidance.

Markets are currently pricing in a total of 50 basis points in rate cuts this year, with expectations for the first reduction shifting to October from the previously anticipated July timeline.

Gold tends to perform well in a low-interest-rate environment as it reduces the opportunity cost of holding non-yielding assets like bullion.

In other precious metals, spot silver dropped 1.5% to USD 31.74 an ounce, palladium slipped 0.3% to USD 947.81, while platinum edged up 0.4% to USD 979.64.