Gold prices erased early gains to trade lower on Tuesday after Chinese President Xi Jinping promised to lower the import tariffs on certain products, helping soothe fears over an escalating trade row with the United States.

Xi has promised to open the country's economy further and lower the import tariffs on products, including cars. His comments sent US S&P 500 E-mini futures higher by 1.2 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan recovered from early falls and advanced 0.8 per cent.

The dollar was up 0.3 per cent at 107.130 yen after going as high as 107.245. The greenback had fallen in the two previous sessions as rhetoric from Chinese and US policymakers had kept markets wary.

Spot gold was down 0.2 per cent at $1,333.90 an ounce as of 0321 GMT, after rising to a near one-week high of $1,338.12 earlier in the session. US gold futures fell 0.2 per cent to $1,337.50 an ounce.

Syria gas attack

Meanwhile, concerns over reports of a poison gas attack in Syria offered underlying support to the bullion which is often seen as an alternative investment during times of political and financial uncertainty.

“With geopolitical risk in the Middle East bubbling and the never-ending trade war headline risks, gold bid has remained exceptionally firm as the possibility of US military intervention in Syria has increased dramatically after an alleged chemical-weapons attack,” said Stephen Innes, APAC trading head at OANDA.

UN Security Council vote

The United States plans to call for a UN Security Council vote on Tuesday on a proposal for a new inquiry into responsibility for use of chemical weapons in Syria after reports of a poison gas attack on a rebel-held town, diplomats said.

US President Donald Trump had on Monday promised quick, forceful action in response to the suspected attack, appearing to suggest a potential military response.

In other precious metals, silver was steady at $16.45 an ounce, platinum gained 0.3 per cent to $934.55 an ounce, and palladium rose 0.3 per cent to $932 an ounce.