Gold futures finished lower Thursday, suffering back-to-back losses after the haven metal scored a nearly six-year high early in the week.
The impending sideline meetings at the Group of 20 conference in Japan between U.S. President Donald Trump and his Chinese counterpart Xi Jinping held the attention of financial markets, which had been supportive for gold in recent sessions.
Analysts at Zaner Metals "suspect volatility in the gold market might begin to moderate as the market slows its profit-taking liquidation wave and waits for the outcome of the Saturday trade meeting between the U.S. and China."
"The consensus impact from the meeting is likely to trumpet coordinated support for the global economy, and that should be supportive of gold when the markets return to action on Monday," they said in a daily note.
August gold GCQ19, +0.04% edge down by $3.40, or 0.2%, to settle at $1,412 an ounce. Prices had settled at $1,418.70 Tuesday, the most robust settlement price for a most-active contract since Aug. 28, 2013, according to FactSet data.
Read: Why gold prices have climbed to their highest since 2013
Trump and Xi will use the G-20 meeting this weekend to "press pause" on their continuing trade war, analysts have said. Early Thursday, reports said China had set the terms for the negotiations. The Wall Street Journal reported that Xi will present President Donald Trump terms, focused in part on easier treatment of the controversial Huawei Technologies Co.
The demands raise some doubts that the two sides can achieve a detente and comes after a report from the South China Morning Post that a tentative U.S.-China truce had been achieved.
"Gold continues to soften after its euphoric surge" as many investors "grow cautiously optimistic that positive developments will come out of... the Trump and Xi meeting at the sidelines of the G-20 meeting in Osaka. The key to the deal may be if Trump lifts part of the ban on Huawei in exchange for seeing Xi deliver changes to Chinese law to help enforce other parts of the trade deal," said Edward Moya, senior market analyst with Oanda.
Stocks were reflecting some nervousness ahead of the meetings, though U.S. benchmark stock indexes were trading a higher as gold futures settled Thursday. Read Market Snapshot. Gold also fell as the leading dollar index DXY, -0.07% traded little changed.
Expectations for lower interest rates among global central banks and geopolitical concerns centered on trade spats and tensions with Iran had been making gold a preferred investment this spring, especially as competing low-risk U.S. Treasury bond yields dropped. The yield on the 10-year note TMUBMUSD10Y, -0.36% fell below 2% in recent sessions.
Read: How to get started with gold-coin investing
In other metals trading, the most-active September silver contract SIU19, +0.40% fell 8.1 cents, or 0.5%, to $15.294 an ounce and September copper HGU19, +0.04% added 0.04% to $2.717 a pound. October platinum PLV19, +2.68% which is now the most active, fell 0.6% to $817.50 an ounce, while September palladium PAU19, -0.65% added 0.9% to $1,538.90 an ounce.
Among exchange-traded funds, SPDR Gold Shares GLD, +0.27% traded little changed, holding onto a week-to-date climb of 0.7%