June 3 (Reuters) - Gold fell over 1% on Tuesday after hitting a near four-week high, pressured by a firmer dollar as investors grew cautious ahead of a potential call between U.S. President Donald Trump and Chinese leader Xi Jinping.
Spot gold fell 1.1% to $3,340.79 an ounce as of 10:21 a.m. ET (1421 GMT), after hitting its highest since May 8, earlier in the session.
U.S. gold futures eased 0.9% to $3,365.90.
The dollar (.DXY), rose 0.5% from an over-a-month low hit earlier in the session, making gold costlier for foreign buyers.
"We are moving into this period that is well known to be the summer doldrums, so there's an expectation that the gold market could fall into a bit of a lull or a sideways consolidation," said David Meger, director of metals trading at High Ridge Futures.
Markets are on edge ahead of a likely Trump-Xi call this week, after Trump accused China of violating an agreement to roll back tariffs. The talks come as trade tensions between the world's two largest economies continue to simmer.
Separately, the European Commission said it would push for lower U.S. tariffs even as Trump proposed doubling duties on steel and aluminum, while Washington urged trade partners to submit revised offers by Wednesday to speed up talks.
Investors are also eyeing Friday's U.S. nonfarm payrolls data and a slate of Federal Reserve speakers for clues on rate policy.
"I believe the Fed is ready to begin to cut rates again, but more than likely not until September...that is another factor likely to weigh on the dollar and support gold," Meger added.
Gold, a safe-haven during times of political and economic uncertainty, tends to thrive in a low-interest rate environment. It is up about 28% this year.
Spot silver fell 1.2% to $34.37 an ounce, but lingered near a seven-month peak hit in the previous session.
"Continued strength in copper prices - fueled by resilient Chinese demand, tight inventories outside the U.S., and green energy transitions - could help sustain the rally in silver," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
Platinum lost 0.4% to $1,059.32, while palladium was up 1.4% at $1,003.10.
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Andrea Ricci
