PRECIOUS-Gold falls on firmer US dollar and rising trade optimism

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EU says trade deal with US within reach

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Trump presses Federal Reserve Chair Powell to cut rates

(Updates for EMEA morning session)

By Anmol Choubey

July 25 (Reuters) - Gold prices fell on Friday, pressured by a recovery in the U.S. dollar and optimism over progress in trade talks between the United States and the European Union.

Spot gold was down 0.5% at $3,350.08 per ounce, as of 0820 GMT. U.S. gold futures fell 0.6% to $3,351.70.

The U.S dollar index rebounded from more than a two-week low, making bullion more expensive for overseas buyers, while benchmark 10-year U.S. Treasury yields rose.

A resurgence in risk appetite driven by optimism over potential tariff negotiations, and better-than-expected jobless claims reinforcing the view that the U.S. Federal Reserve is unlikely to cut rates, is pressuring gold, said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.

"There is an element of uncertainty that still lingers... with a strong support around $3,300, I see the potential for gold prices to rise should new episodes of volatility be triggered," he said.

The European Commission said on Thursday a negotiated trade solution with the United States is within reach - while EU members voted to approve counter-tariffs on 93 billion euros ($109 billion) of U.S. goods in case the talks collapse.

Data showed the number of Americans filing new applications for jobless benefits fell to a three-month low last week, pointing to stable labour market conditions.

Meanwhile, President Donald Trump pressed Fed Chair Jerome Powell to lower interest rates in a tense visit to the U.S. central bank on Thursday, less than a week before the next rate-setting meeting where policymakers are expected to hold interest rates steady.

Markets are pricing in a potential rate cut in September.

Gold typically performs well during periods of uncertainty and in low-interest-rate environments.

Elsewhere, spot silver fell 0.5% to $38.90 per ounce, but was on track for a weekly gain, up about 1.9% so far. Platinum lost 0.6% to $1,400.02 and palladium slipped 0.7% to $1,219.20. (Reporting by Anmol Choubey in Bengaluru; Editing by Rachna Uppal)