Gold prices fell on Tuesday after better-than-expected U.S. retail sales data lowered expectations of an interest rate cut by the U.S. Federal Reserve and boosted the dollar.
"The (gold) market is more reliant on the macro factors to be driven higher. If we continue to see stronger data like the retail numbers, it presents a headwind for the market," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
"The key event the market is tracking is the July FOMC meeting and the Fed rate cut expectations, and we have seen that the expectations have declined a little bit."
The U.S Commerce Department said retail sales rose 0.4% last month as households stepped up purchases of motor vehicles and a variety of other goods.
Economists polled by Reuters had forecast retail sales edging up 0.1% in June.
The dollar rose 0.4% against major rivals on the upbeat U.S. data, making greenback-denominated assets such as gold costlier for investors holding other currencies.
"We've seen a return to big-news-is-bad-news scenario whereby a strong piece of data, which could discourage the U.S. Fed from cutting interest rates, is having big implications on the market," OANDA senior market analyst Craig Erlam said.
The retail sales data came ahead of major central bank decisions, with the European Central Bank due on July 25 and the Fed expected to deliver a U.S. interest rate cut shortly thereafter.
Higher rates tends to boost the dollar and increase the opportunity cost of holding non-yielding bullion.
On the U.S.-China trade front, U.S. President Donald Trump said slowing economic growth in the world's second largest economy showed U.S. tariffs were having "a major effect" and Washington could add pressure.
U.S. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer would hold further trade talks with their Chinese counterparts by phone this week, part of efforts to end the spat, which has weighed on markets.
Gold is a preferred safe-haven asset during economic and political uncertainties.
On the technical front, spot gold was holding in a narrow range of $1,404-$1,421, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver rose 1.5 % to $15.62 per ounce, after touching its highest since Feb 28 at $15.66 earlier in the session.
Platinum was up 1% at $847.43, after touching its highest since May 15 at $850.46, while palladium dipped 1% to $1,552.49 per ounce.