Gold ended lower on Tuesday as a rise in U.S. retail sales contributed to a stronger U.S. dollar, pressuring prices for the precious metal.
The upbeat retail sales number, however, also lifted prices for silver, brightening the metal's industrial demand prospects.
A stronger U.S. dollar against both the euro EURUSD, +0.0357% and British pound GBPUSD, +0.0403% "have dampened whatever bullish edge the [gold] markets had" on Tuesday, said Stephen Innes, managing partner at Vanguard Markets. "But Fed speak should continue to be more supportive for gold than not this week."
August gold trading on Comex GCQ19, -0.29% fell $2.30, or 0.2%, to settle at $1,411.20 an ounce. On Monday, the yellow metal booked its highest most-active contract settlement since July 3, which saw a finish at $1,420.90-the highest since May 2013, FactSet data show.
September silver SIU19, -0.37% meanwhile, picked up 31.1 cents, or 2%, to $15.678 an ounce, the highest finish for a most-active contract since late February, FactSet data show.
"Silver behaved more like an industrial metal" on Tuesday, buoyed by hopes of a U.S.-China trade deal and better-than-expected U.S. retail sales numbers, said Chintan Karnani, chief market analyst at Insignia Consultants.
The move for gold, however, comes as the dollar strengthened, advancing 0.5%, as gauged by the ICE U.S. Dollar Index DXY, -0.03% A stronger dollar tens to be a negative for commodities priced in the unit, making them relatively more expensive to users of other currencies.
U.S. stock indexes, the Dow Jones Industrial Average DJIA, -0.09% and the S&P 500 SPX, -0.34% traded lower as gold futures settled, though traded not far from all-time highs after the main benchmarks finished at records on Monday.
Market participants say that the backdrop of a strengthening dollar and bullish moves in stocks was keeping gold prices in check but its uptrend remains in force.
Edward Moya, senior market analyst at Oanda, said "gold's bullish outlook remains intact with short-term resistance resting at the $1,500 an ounce level," in a Tuesday research note.
Federal Reserve Chairman Jerome Powell, in testimony before House and Senate lawmakers over two days last week, offered no pushback to market expectations for a rate move when policy makers meet July 30-31, analysts said. Lower rates are bullish for gold because it diminishes the competition between investing in the perceived safety of sovereign debt and bullion.
Among economic data Tuesday, U.S. retail sales data revealed a 0.4% rise in June, but the cost of imported goods in June fell by 0.9%, the steepest amount in six months, while industrial production last month was flat.
In other metals trading on Comex, prices for copper finished lower, with the September contract HGU19, +0.09% down 1.1 cents, or 0.4%, to $2.70 a pound. October platinum PLV19, -0.08% rose $1.70, or 0.2% to $846.90 an ounce, but September palladium PAU19, +0.27% dropped $46.60, or 3%, to $1,516.30 an ounce.
Read: Platinum is a bargain hidden behind the rally in palladium and gold
Exchange-traded fund SPDR Gold Shares GLD, -0.85% fell by 0.5%.