Gold falls on stronger dollar

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Gold futures on the COMEX division of the New York Mercantile Exchange fell on a stronger dollar Tuesday.

The most active gold contract for December delivery dropped 13. 7 U.S. dollars, or 1.03 percent, to settle at 1,320.5 dollars per ounce.

Dollar went strong against euro and Japanese yen Tuesday on a strong July report on retail sales. The dollar index, a gauge against a basket of major currencies, rose to 81.772 from 81.331 late Monday. U.S. Commerce Department estimated that sales at U.S. retailers increased 0.2 percent in July, the fourth straight monthly gain.

Market analysts believe that the retail sales data will be the first of many reports to be released this week that should be consistent with the U.S. Federal Reserve scale-back of its bond purchase in September.

The consumer price index to be released Thursday is expected to be lower, and housing starts to be published Friday is expected to be higher.

However, Atlanta Fed Bank President Dennis Lockhart said Tuesday that the uneven performance of the economy has made it impossible for the Fed to make any decisions regarding its asset purchase program soon.

Gold prices have kept rising for four sessions, driven by better-than-expected Chinese economic data. China is expected to overtake India this year to become the world's largest gold consumer, according to World Gold Council.

Silver for September delivery gained 0.4 cent, or 0.02 percent, to close at 21.343 dollars per ounce. Platinum for October delivery rose 1 dollar, or 0.07 percent, to close at 1,499.7 dollars per ounce.

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