Gold retreated on Tuesday from an over five-month peak as upbeat U.S. retail sales data for October gave a fillip to the dollar, making the metal more expensive for holders of other currencies.
Spot gold was down 0.4pc at $1,855.78 per ounce by 12:04 p.m. ET (1704 GMT), having earlier hit $1,876.90, its highest since June 14.
U.S. gold futures dipped 0.5pc to $1,858.20.
Retail sales in the United States accelerated more than expected last month, giving the economy a lift at the start of the fourth quarter and sending the dollar to a 16-month high.
The report shows consumption can handle high prices and remains pretty strong, which is positive for risk appetite, said Edward Moya, senior market analyst at brokerage OANDA.
"This was a pretty strong retail sales beat so there are mounting risks to the outlook. It will be a slower grind higher (for gold), but we should still have the all-clear for a move towards $1,900," Moya said.
Gold has added more than 2pc since last Tuesday after data showed U.S. consumer prices surged in October. ?
"The notion that U.S. inflation has yet to peak should keep bullion well bid, as long as the Fed doesn't veer from its patient approach to any rates lift off," said Han Tan, chief market analyst at Exinity.
Richmond Federal Reserve President Thomas Barkin said on Monday the Fed will not hesitate to raise interest rates, but the central bank should wait to gauge if inflation and labor shortages prove to be more long-lasting.
Rate hikes tend to weigh on gold, as they push bond yields up, raising the metal's opportunity cost.
Silver fell 0.4pc to $24.93 per ounce and platinum dropped 1.7pc to $1,068.76, while palladium edged up 0.1pc at $2,155.80.