Gold slid sharply for a second day on Tuesday, August 15, after better-than-expected U.S. economic data and a decrease in tensions over North Korea encouraged investors to buy riskier assets, boosting stocks, the U.S. dollar and bond yields.
Spot gold was down 1.1 percent at $1,268.53 an ounce at 1320 GMT, taking losses since Friday’s high to 1.8 percent.
U.S. gold futures for December delivery were 1.3 percent lower at $1,273.80 an ounce.
Gold, seen as a safe haven in times of uncertainty, rose to a two-month high of $1,291.86 on Friday after a week of escalating military threats between Washington and Pyongyang.
But fears of conflict eased when North Korean leader Kim Jong Un on Tuesday signalled he would delay a decision on firing missiles towards Guam, a U.S. territory in the Pacific.
“Global tensions seem now to be ratcheting down,” Robin Bhar, head of metals research at Societe Generale, said.
“Investors are looking to liquidate (positions in gold) and pick up some more risky assets.”
Gold’s fall accelerated after strong U.S. retail sales in July and a high business conditions index suggested strong economic growth.
The retreat from Friday’s high is the third time this year that gold has failed to reach $1,300, a key technical level.
Technical fibonacci supports for gold were at $1,274.70 and $1,261.30, ScotiaMocatta analysts said in a note.
In other precious metals, silver was down 2.6 percent at $16.59 an ounce, falling below its 100- and 200-day moving averages.
Platinum was down 1.7 percent at $948.75, while palladium was 1.1 percent lower at $885.30 an ounce.
