Gold fell 1 percent on Thursday, snapping five sessions of gains, as the dollar strengthened on the back of upbeat U.S. data and concerns eased over further losses in the yuan after the devaluation of the currency by China.
Falling equities, dollar strength and speculation that the weaker yuan could delay a U.S. interest rate rise sparked a short-covering rally in gold this week after its recent drop to 5-1/2 year lows, pushing prices to their highest since mid-July.
On Thursday, however, data showed that U.S. retail sales rebounded in July, suggesting the economy was growing solidly early in the third quarter and bolstering the case for a Federal Reserve interest rate hike.
This is negative for gold as it would lift the opportunity cost of holding non-yielding bullion while boosting the dollar.
Spot gold was down 0.9 percent at $1,114.56 an ounce, while U.S. gold futures for December delivery settled down 0.7 percent at $1,115.60 an ounce. Earlier it hit its highest since mid July at $1,126.30.