Spot gold was down 0.6 percent at $1,281.32, as of 0738 GMT, while US gold futures were 0.5 percent lower at $1,283.10 per ounce.
"Because of improved investor sentiment, gold is coming off its highs and may have to stay around the current levels," said Mark To, head of research at Wing Fung Precious Metals in Hong Kong.
"The market has been troubled by uncertainties around trade war and interest rate hikes. However, now most of the stake holders, including the authorities in US, China and Fed, are trying to cooperate and put up a positive tone and create a stable environment for investors."
"A lot of people had gone long in gold as they bet that economic growth in US and China might slow down due to the trade war," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
"If there are positive outcomes (in the trade talk) there could be some profit taking (in gold)."
Gold is trading lower as the dollar is showing early signs of shaking off its recent bout of Fed-induced weakness, said Stephen Innes, APAC trading head at OANDA.
"However, the positive chatter around US-China trade tensions will temper expectations (for the dollar)," Innes said.
Gold prices have gained about 11 percent since hitting a more than 1-1/2-year low in mid-August due to tumultuous stock markets and a slightly weaker dollar. Bullion prices hit their highest since June 2018 at $1,298.42 on Friday.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw a bit of outflows on Friday. But, holdings are still at their highest since August 2018, underpinning demand for the safe-haven metal.