Gold fell 1 percent on Monday, hovering near its lowest price in two weeks as stronger U.S. retail sales data inspired economic hopes and reduced the safe-haven bid for gold.
Bullion fell for a third session after the Commerce Department said U.S. retail sales unexpectedly rose in April, pointing to underlying strength in the economy.
Exchange-traded products liquidated more gold holdings on the data.
A 1 percent decline in crude oil prices also reduced gold's inflation-hedge appeal.
Holdings in major gold-backed exchange-traded products (ETP) monitored by Reuters fell 0.3 percent. On Friday, they had posted the first daily inflow in nearly two months.
"In our view, there is greater risk of physical demand slowing further, rather than sizeable ETP inflows, thus posing downside risk to prices in the near term," said Suki Cooper, precious metals strategist at Barclays Capital.
Spot gold dropped 1.1 percent to $1,431.49 an ounce by 3:37 p.m. EDT (1937 GMT). Earlier in the session, it hit a low of $1,426.40 an ounce, near a two-week low of $1,420.
U.S. gold for June delivery settled down $2.30 at $1,434.30 an ounce, with trading volume about 25 percent below its 30-day average, preliminary Reuters data showed.
The metal was also under pressure as the dollar initially gained versus the euro after European Central Bank policymaker Ignazio Visco said if the euro zone economy needed more help, the deposit rate could be cut to negative territory.
The dollar has since reversed gains against the euro but edged higher against a basket of major currencies.
ETP Outflow Resumes
Holdings in the SPDR Gold Trust, the world's largest gold-backed ETP, fell around 0.2 percent to 1,051.65 tonnes on Friday after rising slightly in the day-earlier session. The holdings stood at a four-year low.
A report by the Commodity Futures Trading Commission (CFTC) showed hedge funds and money managers trimmed their bullish bets in gold futures and options in the week to May 7 on weaker bullion prices and outflows in gold exchange-traded funds.
This week, gold will likely take trading cues from a busy schedule of U.S. economic indicators including producer prices, consumer price index and consumer confidence.
On Wednesday, investors will also find out gold investments held by prominent hedge fund managers led by John Paulson at the end of the first quarter. Funds and institutional investors are required to file with the Securities and Exchange Commission 45 days after the end of each quarter.