(Reuters) - Safe-haven gold reversed course to fall on Thursday after U.S. President Donald Trump and Chinese leader Xi Jinping agreed to further talks to settle trade disputes, while silver breached the key $35 level to reach a 13-year high.

Spot gold fell 0.7% to $3,351.69 an ounce as of 02:13 p.m. EDT (1813 GMT), after earlier trading 0.6% higher. U.S. gold futures settled 0.7% lower at $3,375.10.

Trump said on social media that the talks focused primarily on trade led to "a very positive conclusion." According to a Chinese government summary, Xi told Trump to back down from trade measures and warned him against threatening steps on Taiwan.

"Trump will have a positive spin on the call with President Xi, therefore decreasing the imminent decoupling risks from China and the U.S., which have ultimately been one of the factors driving inflows into precious metals," said Daniel Ghali, commodity strategist at TD Securities.

Gold, a safe-haven asset during times of political and economic uncertainty, has gained about 28% so far this year.

Central banks worldwide are set to buy 1,000 metric tons of gold in 2025, marking a fourth straight year of massive purchases as they shift reserves away from dollar assets,  Metals Focus said.

Meanwhile, data showed weekly U.S. jobless claims increased for a second straight week. All eyes now turn to Friday's nonfarm payrolls report.

Trump on Wednesday renewed calls for U.S. Federal Reserve Chair Jerome Powell to cut interest rates.

"I think that a weakening in the U.S. labor market will increase bets on a dovish Fed, (which) would be positive for gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.

Zero-yield bullion tends to thrive in a low interest-rate environment.

Meanwhile, spot silver jumped 1.9% to $35.61, after earlier hitting its highest level since February 2012. The gold-silver ratio was currently at 94, down from 105 in April.

"Extreme volatility may be back here as silver can really gallop, both ways," said Tai Wong, an independent metals trader.

Platinum rose 4.8% to $1,136.45, its highest level since March 2022, and palladium rose 0.3% at $1,003.56.

(Reporting by Sherin Elizabeth Varghese and Anushree Mukherjee in Bengaluru, Editing by Ed Osmond, Matthew Lewis and Pooja Desai)

By Sherin Elizabeth Varghese