NEW YORK/LONDON: Gold slid on Thursday after stronger-than-expected US economic data helped ease concerns about the impending start of the winding down of stimulus from the Federal Reserve.
Platinum group metals also tumbled on easing supply fears after South Africa's top mining union delayed plans to strike.
Gold remained lower after US government said retail sales rose more than expected in May and first-time applications for jobless benefits fell last week, showing signs of resilience in the economy despite belt-tightening in Washington.
Data was seen as adding to arguments for the Fed to end its $85-billion monthly bond purchases. Analysts said that a gradual end of Fed stimulus has already driven up US short-term interest rates, reflected in the Treasury bond yields, and that keeps gold from rising further.
"It's the old argument that when you foresee rate rises then the opportunity cost of holding gold will be higher and less attractive for investors," Danske Bank annalist Christin Tuxen.
Spot gold was down 0.7 percent at $1,378.61 an ounce by 3:26 p.m. EDT (1926 GMT), hovering around $10 above a three-week low of $1,366 set on Tuesday.
US Comex gold futures for August delivery settled down $14.20 to $1,377.80, with trading volume at around 40 percent below its 30-day average for a fourth day, preliminary Reuters data showed.
Stimulus unwinding is likely to spell further downside for gold, which is struggling to stay on an even keel with fund money draining away from the metal since prices crashed in April. Bullion is now some 27 percent down from record highs achieved in September 2011.
Markets will watch closely the Fed policy meeting on June 18 and 19. Most economists expect the Fed to scale back the size of its bond purchases by year-end, and several expect reduced buying as early as September, a Reuters poll showed.
"Gold prices are vulnerable to additional declines over the next few months. You have reduced import demand for gold from India, healthy supply growth this year, and overall reductions in investor interest," said Erica Rannestad, precious metals analyst at commodities firm CPM Group.
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