Investing.com - Gold prices were under pressure on Tuesday as a stronger dollar pushed the precious metal back towards 7-month lows hit a week earlier.
At 10:55AM ET (14:55GMT), gold futures for August delivery on the Comex division of the New York Mercantile Exchange gained $4.90, or 0.4%, to $1,254.70 a troy ounce.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.22% to 94.01.
The dollar was seeing upside on Tuesday based primarily on weakness in major rivals.
The euro saw weakness as data revealed that German investor confidence fell to the lowest level in six years in July as fears over an escalation in trade tensions with the U.S. dampened the economic outlook.
Sterling was also under pressure as the first-ever monthly GDP figures painted a mixed picture of the economy, with modest growth driven by the services sector, partly offset by falling construction and industrial output.
Some analysts believe the data will keep the Bank of England on track for an August interest rate hike, but others fear that political instability may prompt policymakers to hold off.
British Prime Minister Theresa May is facing down a rebellion in her Conservative Party after Boris Johnson resigned as British foreign secretary on Monday, becoming the third minister to quit the government in twenty-four hours, rather than back her plans for a soft Brexit.
Dollar-denominated assets such as gold are sensitive to moves in the dollar. A rise in the dollar makes gold more expensive for holders of foreign currency, reducing demand for the precious metal.
U.S. data released on Tuesday continued to show signs of economic strength with small business optimism dipping much less than expected in June, holding onto the sixth highest level in its history.
The Job Openings and Labor Turnover survey (JOLTs) reinforced U.S. labor market strength as the report showed 6.638 million job openings, better than the 6.583 million expected.
In other metals trading, silver futures lost 0.3% at $16.090 a troy ounce by 10:57AM ET (14:57GMT).
Palladium futures fell 1.8% to $938.00 an ounce, while sister metal platinum traded down 1.2% at $834.20.
In base metals, copper gave up 0.9% to $2.825 a pound.