Gold slipped on Monday as the US dollar strengthened and precious metals prices remained within a tight range as investors awaited key US data. Spot gold lost 0.3 percent at $1,314.17 per ounce by 2:31 p.m. EDT (1831 GMT), erasing earlier gains after the US dollar, in which it is priced, turned positive. US gold futures for June settled down $2.50, or 0.2 percent, at $1,318.20 per ounce.
The dollar rose on Monday, erasing earlier losses, as investors questioned whether a rally that last week sent the greenback to more than four-month highs had run out of steam. "Gold is largely paying attention to the dollar," said John Caruso, senior market strategist at RJO Futures. US retail sales growth would suggest a strengthening economy and give the Federal Reserve more reason to raise interest rates.
Higher US rates make gold a less attractive investment, because bullion does not offer interest. "Over the short term, and particularly during May, we see gold trading between $1,285 and $1,338 an ounce as continued strength in the dollar and rising rates pressure values lower," said INTL FCStone analyst Edward Meir. However, gold is expected to remain in this year's narrow range, mostly between $1,300 and $1,350, unless supply or demand fundamentals dramatically change. Silver was down 0.7 percent at $16.51 per ounce. Platinum declined 1.1 percent at $911.60 per ounce and palladium lost 0.2 percent at $994.22.