NEW YORK: Gold prices retreated from a more than one-week peak on Tuesday, as some investors opted for the dollar instead as surging COVID-19 Delta variant cases posed a threat to a global economic recovery.

Spot gold fell 0.1% to $1,785.48 per ounce by 1432 GMT. US gold futures were down 0.2% at $1,785.80 per ounce.

"Gold is very sensitive to any kind of move in the dollar and with the dollar getting stronger its adding some pressure on the metals," said Daniel Pavilonis, senior market strategist at RJO Futures.

The dollar index jumped 0.4% against its rivals, making gold more expensive for other currency holders.

Risk sentiment in wider financial markets remained weak as disappointing US retail sales data and a spike in COVID-19 infections worldwide dented appetite for riskier assets.

Offering some respite to gold, benchmark 10-year Treasury yields dipped to a near two-week low, translating into reduced opportunity cost of holding non-interest bearing gold.

"US Treasury yields are giving gold a little bit of cover, and we're seeing a higher probability of inflation without rising interest rates," Pavilonis said.