By 05:52 (GMT), spot gold fell 1.9% to $3,318.71 per ounce. US gold futures fell 2.7% to $3,328.10.
US stocks and the dollar rebounded after Trump on Tuesday backed down from his threats to fire Federal Reserve Chairman Jerome Powell, days after he faced mounting criticism for not cutting interest rates.
Trump also expressed optimism that reaching a trade agreement with Beijing could lead to a "significant" reduction in tariffs on Chinese goods, suggesting that the final agreement would not be "anywhere near" current tariff rates.
For his part, US Treasury Secretary Scott Besant said he believes trade tensions between the United States and China will ease, but negotiations with Beijing have not yet begun and will be "exhausting."
Minnesota Federal Reserve President Neel Kashkari said it's too early to know how much short-term borrowing costs will need to adjust due to tariffs and their expected impact on inflation and the economy.
Gold hit a new record high on Tuesday, its 28th this year, rising to $3,500 for the first time.
As for other precious metals, spot silver rose 0.4% to $32.64 per ounce, platinum fell 0.1% to $957.90, and palladium fell 0.5% to $931.51.