Gold prices edged lower on Thursday, weighed down by a stronger dollar and robust US economic data, while caution persisted as markets awaited clarity on tariff developments.
Spot gold fell 0.3% to $3,337.43 per ounce by 0155 p.m. EDT (1755 GMT) after hitting a session low of $3,309.59.
US gold futures settled 0.4% lower at $3,345.3.
Following the latest US data, "there was a bit of rise in the dollar and US Treasury yields are higher. So, it's put a little weakness in the gold market," said Bob Haberkorn, senior market strategist at RJO Futures, Reuters reported.
The dollar gained 0.3%, making the greenback-priced gold more expensive for foreign currency holders.
US jobless claims fell last week, pointing to steady job growth in July, while retail sales data beat expectations, adding 0.6% last month, though some of the gain likely reflected tariff-driven price increases.
Fed Governor Adriana Kugler said the Fed should not cut interest rates "for some time" as the impact of Trump administration tariffs begins to pass through to prices.
Gold is often regarded as a hedge against uncertainty and inflation, but higher interest rates diminish its appeal, as it yields no interest.
On the trade front, Japan's top trade negotiator held talks with the US Commerce Secretary on US tariffs, as Tokyo races to avert a 25% levy that will be imposed unless a deal is clinched by an August 1 deadline.
"If Trump follows through on his threats and trade tensions escalate, it’s not a stretch to imagine gold challenging — and potentially breaking- its record highs again," said Fawad Razaq, market analyst at City Index and FOREX.com.
Meanwhile, gold exports from Switzerland jumped 44% month-on-month in June as bullion flew back to the vaults in the United Kingdom from the US via Swiss refineries, Swiss customs data showed on Thursday.
Palladium was up 3.8% at $1,277.78, reaching its highest level since September 2023.
Fears of an escalating war in Russia, a major palladium exporter, are fuelling supply concerns and driving prices higher, Haberkorn said.
Elsewhere, spot silver added 0.3% to $38.07 per ounce and platinum gained 3.1% to $1,460.13.
