Gold prices dropped to their lowest in more than a month on Thursday as investors waited for a key U.S. inflation print for cues into the Federal Reserve's policy path, while thawing U.S.-China trade tensions dented the bullion's appeal.

Spot gold dipped 1.1% to $3,144.51 an ounce as of 0636 GMT, after hitting its lowest since April 10 earlier in the session.

U.S. gold futures fell 1.3% to $3,146.20.

The U.S. and China agreed to reduce tariffs drastically and adopted a 90-day pause, de-escalating a potentially damaging trade war between the world's two largest economies.

"The outlook for intraday today is weak for the yellow metal as the positive talks between the U.S. and China have eroded safe-haven appeal," said Jigar Trivedi, senior commodity analyst at Reliance Securities.

"The dollar index is making an attempt to rebound and in case the U.S. posts better retail sales and PPI data, there could be more pain in the yellow metal."

The spotlight is now on the U.S. producer price index (PPI) data, due at 1230 GMT, after a softer-than-expected consumer data earlier this week.

Fed policymakers are leaving interest rates where they are while trying to assess the impact of U.S. President Donald Trump's tariffs and trade negotiations on prices and the economy. So far, the hard data is giving them little to go on.

Fed Chair Jerome Powell's speech later in the day will be watched for clues into the Fed's rate path.

Markets are expecting 50 basis points of rate cuts this year, with the reductions now seen starting from October.

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

Spot silver fell 1.1% to $31.86 an ounce and palladium dropped 0.5% to $946.40. Platinum rose 0.2% to $977.75. - Reuters