Gold fell slightly to its lowest level in a week on Tuesday as the weakening U.S. economic data was offset by a stronger dollar, and investors waited for clearer signals on the direction of Federal Reserve (FED) interest rates.
At 1747 GMT, spot gold fell 0.3% to $1,420.45 an ounce, earlier hitting its lowest level since July 17 at $1,413.80. U.S. gold futures fell 0.4% to close at $1,421.70 an ounce.
Gold prices recovered as U.S. housing sales and monthly manufacturing data released by the Federal Reserve Bank of Richmond were weaker than expected.
Tai Wong, Mandike's head of trading in basic metals and precious metal derivatives, said: "The Richmond Fed data surprised some people. Although it wasn't really that important, it seemed to trigger some buying."
"Gold is likely to remain in the $1,415-35 range. The market is bullish above $1,430 and has a low popularity below $1,420."
The dollar index rose to its highest level in more than a month, supported by an extension of the U.S. government's debt limit agreement, raising the cost of purchasing dollar-denominated assets such as gold for investors holding other currencies.
Investors are watching the Fed's policy meeting on July 30-31 and are expected to cut overnight target lending rates. The ECB is also expected to signal easing when it meets on Thursday.
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