Gold declined on Tuesday as market participants awaited further developments from ongoing U.S.-China trade talks in London, with negotiations extending into a second day.

Spot gold fell 0.5% to $3,311.16 an ounce, as of 0125 GMT. U.S. gold futures also fell 0.7% to $3,330.90.

High-level trade talks between the U.S. and Chinese officials are extending into a second day, with discussions encompassing issues ranging from tariffs to rare earth restrictions.

"With these key the U.S.-China trade talks still in the works, gold is trading reservedly until we see what if any progress is made between the two global superpowers," said Tim Waterer, chief market analyst at KCM Trade.

U.S. President Donald Trump said his administration was "doing well" in the negotiations and noted positive reports from the talks.

Last month, both sides agreed to a temporary pause tariffs, offering some relief to financial markets.

"If traders come away from the U.S.-China talks this week thinking that the two nations remain on track to achieve a broader trade deal, safe-haven demand for assets such as gold could ease."

Data from China showed export growth slowed to a three-month low in May as U.S. tariffs impacted shipments, while factory-gate deflation worsened to its deepest level in two years.

Meanwhile, investors are now awaiting U.S. inflation data on Wednesday for more cues on the Federal Reserve's monetary policy path.

"If CPI has ticked marginally higher that would be an expected result, but if it jumps then that could raise some alarm bells for investors, and any resulting flight to safety could help the gold price," Waterer said.

Gold gains appeal during uncertain geopolitical and economic times and tends to do well when interest rates are low.

Elsewhere, spot silver was down 0.6% to $36.51 per ounce, platinum dropped 0.8% to $1,210.46, while palladium fell 0.2% to $1,071.75. (Reporting by Anmol Choubey in Bengaluru; Editing by Rashmi Aich)