Gold eased back toward last week's one-month low on Tuesday as US retail sales data lifted the dollar index, and as caution ahead of this week's Federal Reserve announcement on interest rates kept buyers on the sidelines. The Fed meets on Wednesday and Thursday to discuss the timing of the first US rate increase in nearly a decade, which could hurt gold prices. Rock-bottom rates pressure the dollar and cut the opportunity cost of holding non-yielding bullion.
Speculation that a rate rise could come as early as this month has helped knock gold down 6 percent this year, but turbulence in the wider markets and fears of a slowdown in China have called the timing of the move into question. "It's drifting on lack of real interest ahead of the Fed," said James Steel, chief metals analyst for HSBC Securities in New York, adding that the strong dollar also pressured prices.
Spot gold was down 0.5 percent at $1,103.20 an ounce at 2:55 pm EDT (1855 GMT), near Friday's one-month low of $1,098.35. US gold futures for December delivery settled down 0.5 percent at $1,102.60 an ounce. Spot silver was down 0.6 percent at $14.32 an ounce. Spot platinum was up 0.5 percent at $957 an ounce and palladium was up 2.4 percent at $600 an ounce.