Gold fell to near monthly low after stronger-than-expected retail sales numbers made investors more confident that the U.S. economy is recovering.
Gold futures were trading at $1,754.95 on Tuesday, down -2.22%, after retail sales grew 0.7% instead of an expected -0.7%.
The move was also influenced by the dollar index rising 0.2%, making gold more expensive in dollar terms for those holding other currencies.
A stronger dollar and higher bond yields made the precious metal less appealing to investors.
Meanwhile, gold lost some of its earlier gains in Tuesday’s trading, as CPI numbers eased some concerns over inflation (though consumer prices are still up 5.3% from this time last year.) Most investors consider gold to be a great hedge against inflation.
With the slight downturn, some investors consider it a guying opportunity for the precious metal. Skyrocketing energy prices are likely to bump up consumer and producer prices in the near future causing more inflation worries.