Gold falls on firmer dollar, US-China trade tension subside

April 28 (Reuters) - Gold prices eased on Monday as the thawing of trade tensions between the U.S. and China provided some relief to investors, while a stronger dollar further weighed on prices.

FUNDAMENTALS

Spot gold XAU= fell 0.3% to $3,309.31 an ounce, as of 0016 GMT. Bullion hit a record high of $3,500.05 on April 22.

U.S. gold futures GCcv1 gained 0.7% to $3,320.30.

The U.S. dollar .DXY rose 0.2% against a basket of currencies, making bullion more expensive for overseas buyers.

The Trump administration signalled openness last week to de-escalating a trade war between the world's two largest economies that has raised fears of recession. Trump has said talks on tariffs were taking place with China.

On Friday, China exempted some U.S. imports from its steep tariffs in a sign that the trade war between the two countries could be easing, though China quickly knocked down U.S. President Donald Trump's assertion that negotiations were underway.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low interest rate environment.

On the physical front, gold discounts in India jumped last week to the highest level in nearly nine years as record prices deterred buyers, while premiums in China rose to a more than one-year peak, leading to increased shipments to the world's largest bullion consumer.GOL/AS

Among other metals, spot silver XAG= fell 0.6% to $32.87 an ounce, platinum XPT= eased 0.1% at $970.80 and palladium XPD= lost 0.6% to $942.71.

DATA/EVENTS (GMT)

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