Investing.com-- Gold prices fell slightly in Asian trade on Friday as risk appetite improved amid signs of the U.S. and China potentially backing down from a bitter trade conflict, although there still appeared to be no clear path towards a trade deal.

Risk appetite- particularly for equities- also improved following positive earnings from technology giant Alphabet (NASDAQ: GOOGL ), as well as encouraging comments on artificial intelligence demand from Nvidia (NASDAQ: NVDA ) and Amazon (NASDAQ: AMZN ).

A recovery in the dollar- from three-year lows- also pressured broader metal prices. But gold still remained in sight of a $3,500 an ounce record high hit earlier this week.

Spot gold fell 0.9% to $3,318.28/oz, while gold futures expiring in June fell 0.6% to $3,328.67/oz by 01:22 ET (05:22 GMT).

Gold drops from record high amid US-China deescalation hopes

Gold’s Friday losses came as Bloomberg reported that China was considering exempting some U.S. goods from its 125% tariffs, amid rising concerns over the economic cost of the trade war.

Such a move could mark a deescalation in the conflict, and could also invite more conciliatory measures from Washington.

The Bloomberg report comes just after U.S. President Donald Trump claimed that his administration was engaged in some talks with China, although Beijing largely denied that trade talks were taking place.

Still, markets were encouraged by the prospect of some deescalation, which sapped safe haven demand for gold and sparked moves into more risk-driven assets, particularly stocks.

Trump had earlier this week signaled that he could eventually reduce tariffs on China, although this will be contingent on Beijing first coming to the negotiating table. But other U.S. officials warned that a trade deal with China will take time.

This notion, coupled with persistent concerns over the economic impact of a trade war, still kept gold relatively well-bid and in sight of recent peaks.

Other precious metals retreated on Friday as the dollar recovered from three-year lows.

Platinum futures fell 0.9% to $969.10/oz, while silver futures fell 0.4% to $33.378/oz.

Copper set for third straight week of gains; China PMIs awaited

Among industrial metals, copper prices fell on Friday but were set for a third straight week of gains, extending a rebound from steep losses clocked through March.

Benchmark copper futures on the London Metal Exchange steadied at $9,419.55 a ton, while U.S. copper futures fell 0.8% to $4.8453 a pound. But both contracts were trading up between 2% and 3% this week, in their third straight week of gains.

Despite recent gains, copper prices were still trading well below peaks hit earlier this year, as sentiment towards the red metal was eroded by fears that demand in top importer China will be hit by a trade war.

But U.S. copper futures had rallied on bets that Trump’s tariffs will further tighten physical copper supplies in the country.

Focus is now on key Chinese purchasing managers index data, due next week, for more cues on the world’s biggest copper importer.