Gold fell on Tuesday after U.S. economic data and hawkish remarks from Federal Reserve officials drove bets that interest rate cuts may be delayed, but debt default jitters kept a floor under safe-haven bullion.
Spot gold was down 0.7% to $2,005.89 per ounce by 10:30 a.m. EDT (1430 GMT), while U.S. gold futures fell 0.6% to $2,010.40.
U.S. retail sales increased less than expected in April, but the underlying trend was solid, driving an uptick in the dollar and Treasury yields.
Gold slipped as much as 1% to $2,001.09 immediately after the retail sales data, before recovering some ground.
Meanwhile, Cleveland Fed President Loretta Mester said she does not think the U.S. central bank is at a point yet where it can hold rates steady for a period of time, given stubborn inflation, adding to hawkish comments from other Fed officials on Monday.
"We needed to see more signs of a pivot from the Federal Reserve and we haven't really fully seen that yet," said Craig Erlam, a senior market analyst at OANDA.
High interest rates dull non-yielding bullion's appeal, although its considered a hedge against economic uncertainties.
But overall, "traders are going to remain buying any kind of dip on the gold market as they wait out this debt ceiling fiasco," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, adding the $2,000 mark remained a key technical support level.
Democratic President Joe Biden and top congressional Republican Kevin McCarthy will sit down at 3 p.m. EDT to try to make progress on a deal to raise the debt ceiling and avert an economically catastrophic default.
Spot silver slid 0.6% to $23.96 per ounce. Platinum gained 0.2% to $1,066.97 and palladium fell 1% to $1,516.42.
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