PRECIOUS-Gold retreats from nearly 4-week peak as dollar recovers

By Anmol Choubey

June 3 (Reuters) - Gold slipped on Tuesday, retreating from a nearly four-week high, as a modest rise in the U.S. dollar weighed, although uncertainty over the U.S.-China trade agreement kept investors cautious and cushioned the bullion's fall.

Spot gold XAU= fell 0.4% to $3,365.22 an ounce as of 0603 GMT, after hitting its highest since May 8 earlier in the session. U.S. gold futures GCcv1 eased 0.2% to $3,390.10.

On Monday, the metal gained about 2.7%, its strongest daily performance in more than three weeks.

"Dollar recovered slightly and gold came down, so it has been inversely correlated at this point of time," said Brian Lan, managing director at GoldSilver Central, Singapore.

However, gold is still closely tracking developments around global trade, and while investors have slightly reduced their positions in gold, it is not to the extent seen in previous instances when tensions appeared to ease, said Lan.

The U.S. dollar index .DXY recovered slightly from a six-week low.

Trade-related uncertainty remains a key focus.

U.S. President Donald Trump and Chinese President Xi Jinping will likely speak this week, the White House said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions.

U.S. tariffs on imported steel and aluminium will likely double to 50% effective Wednesday, coinciding with the Trump administration's deadline for countries to submit their best offers for trade deals.

The European Commission said it would make a strong case this week for the U.S. to reduce or eliminate tariffs despite Trump's decision to double the duties on steel and aluminium imports.

Elsewhere, spot silver XAG= fell 1.7% to $34.20 an ounce, platinum XPT= rose 0.3% to $1,066.63 and palladium XPD= added 0.1% to $990.25.