Gold prices edged lower on Wednesday, as the dollar firmed on robust U.S. retail sales data, while hopes of an interest rate cut by the Federal Reserve and broad uncertainties over trade between Washington and Beijing kept a lid on declines.
Spot gold was down 0.2% at $1,403.81 per ounce, as of 0536 GMT.
U.S. gold futures slipped 0.3% to $1,406.40 an ounce.
"Yesterday we had positive data from the U.S., gold came down a little; but we are still expecting interest rate to be reduced by the Fed," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Also, "the U.S. and China are not close to any resolution at this point of time and a lot of central banks continue to buy gold, particularly China," which is supportive for gold, he added.
Denting the bullion's appeal, the dollar index gained after data showed that U.S. retail sales increased more than expected in June, adding to recent evidence that the economy is improving.
However, the data barely changed market wagers on a U.S. central bank rate cut this month. Futures are still 100% priced for a cut of 25 basis points, and imply a 27% chance of 50 basis points.
Adding to the sentiment, Fed Chairman Jerome Powell on Tuesday reiterated pledges to "act as appropriate" to keep the U.S. economy humming, in a speech that did not deviate from expectations that a rate cut is on the way.
"The four largest central banks are set to unleash fresh stimulus in the second half of the year and gold's bullish outlook remains intact with short-term resistance resting at the $1,500 an ounce level," Edward Moya, senior market analyst at OANDA, said in a note.
On the trade front, U.S. President Donald Trump on Tuesday said the United States still has a long way to go to conclude a trade deal with China, but could impose tariffs on an additional $325 billion worth of Chinese goods if it needed to do so.
Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.15% to 799.37 tonnes on Tuesday from 800.54 tonnes on Monday.
Spot gold is biased to break a support at $1,404 per ounce, and fall to $1,387, following its failure to break the resistance at $1,421, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver rose 0.3% to $15.60 per ounce, hovering near a more than four-month high of $15.69 hit in the previous session.
Platinum gained 0.1% to $839.08 an ounce, while palladium eased 0.1% to $1,523.11.
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