Gold prices extended losses on Tuesday, hitting a near three-week low as optimism over a U.S.-China trade deal weakened safe-haven demand for the precious metal. Investors also awaited key central bank policy announcements later in the week.

As of 06:52 GMT, spot gold fell 1% to $1,941.65 per ounce, its lowest level since October 10. U.S. gold futures for December delivery dropped 1.5% to $1,957.50 per ounce.

The easing of trade tensions between Washington and Beijing weighed on gold prices as safe-haven inflows diminished. Asian equities consolidated recent strong gains on Tuesday, with improved risk appetite driven by expectations of reduced global trade friction.

Markets widely expect the Federal Reserve to cut interest rates when concluding its policy meeting on Wednesday, with investors keenly watching for any forward-looking remarks from Fed Chair Jerome Powell. Meanwhile, the European Central Bank and Bank of Japan are anticipated to keep rates unchanged later this week.

Gold has gained about 53% this year, supported by geopolitical and economic uncertainties, rate cut expectations, and continued central bank purchases. The metal hit a record high of $2,381.21 per ounce on October 20.

Among other precious metals, spot silver fell 0.8% to $46.51 per ounce, platinum dropped 2.6% to $1,549.85, and palladium declined 1.2% to $1,385.50.