Washington: Gold prices fell by more than 5.3% on Tuesday as US President Donald Trump signaled a potential easing of trade tensions with China. The precious metal's price was approximately $4,126 per ounce at 1500 GMT, despite showing a significant annual gain of around 52.8%.

According to Anadolu Agency, gold reached an all-time high of $4,381.6 on Monday, driven by escalating trade tensions between the United States and China, expectations of interest rate cuts by the Federal Reserve, and central banks increasing their gold reserves. However, the metal's value plummeted after President Trump expressed optimism about reaching a "fair deal" with China. This followed his earlier threats to impose 100% tariffs in response to China's decision to tighten rare earth export controls.

"We're going to be meeting in South Korea in a couple of weeks, and we'll see what we can do," Trump stated at the White House regarding upcoming talks with Chinese President Xi Jinping. "I believe after we leave South Korea ... we're going to have a very good relationship with China."

Contributing to the reduced trade concerns, White House top economic adviser Kevin Hassett mentioned on CNBC that he expects the ongoing government shutdown, now in its 21st day, to likely end this week. If not, the Trump administration may consider implementing stronger measures to compel cooperation from Democrats.

As the government shutdown continues to disrupt economic data flow, investors are focusing on inflation numbers set to be released on Friday, ahead of a Federal Reserve meeting next week.