Gold futures settled notably lower on Tuesday after hawkish comments from Federal Reserve officials. Traders also awaited the outcome of debt-ceiling negotiations in Washington.
The dollar's recovery from early weakness weighed as well on gold prices. The dollar index, which dropped to 102.20 in the Asian session, climbed to 102.69 a little before noon, gaining nearly 0.25%.
Gold futures for July ended lower by $29.70 or about 1.5% at 1,933.00 an ounce, the lowest settlement for the most-active contract in about three weeks.
Silver futures for July ended down $0.398 at $23.893 an ounce, while Copper futures for July settled at $3.6670 per pound, down $0.0840 from the previous close.
Edward Moya, the Senior Market Analyst at OANDA says the bullion is lower as Wall Street awaits a meaningful update with debt ceiling talks.
"The soft landing hopes are still hanging onto a thread and that is keeping some investors from going aggressive into safe-havens," says Moya. "Too many risks remain on the table for investors to go offensive. Risk aversion could get a boost from regional banking fears, debt ceiling drama, and a weakening consumer, but it will likely come from a new catalyst," he adds.
Data from the Commerce Department showed retail sales rose by 0.4% in April after falling by a revised 0.7% in March. Economists had expected retail sales to climb by 0.7% compared to the 1% slump originally reported for the previous month.
Excluding an increase in sales by motor vehicle and parts dealers, retail sales still rose by 0.4% in April after sliding by 0.5% in March. The rebound in ex-auto sales matched economist estimates.
A separate report from the Federal Reserve showed industrial production climbed by 0.5% in April, while revised data showed production was unchanged in each of the two previous months.
Economists had expected industrial production to come in unchanged compared to the 0.4% increase originally reported for the previous month.
