02:00 PM EDT, 09/17/2024 (MT Newswires) -- (Updates prices.)

Gold traded lower midafternoon on Tuesday, falling off a record high for a second day with the dollar and yields rising as U.S. retail sales were stronger than expected last month, the last major economic release ahead of Wednesday's interest-rate decision by the the Federal Reserve's policy committee.

Gold for December delivery was last seen down US$18.10 to US$2,590.80 per ounce.

The drop comes as U.S. retail sales rose by 0.1% in August from July, while the consensus forecast called for a 0.1% monthly drop, according to Marketwatch. The rise shows the U.S. economy continues to grow even as the labor market slows, which may influence the Federal Open Market Committee's interest rate decision tomorrow, with the market expecting a 50 basis point cut to rates.

"Gold holds steady near a record high with an incoming US rate cutting cycle adding support amid the prospect for lower funding costs lifting investment flows into exchange-traded funds. Note, a 25 basis point cut may trigger a setback given the current focus on a 50 basis point cut," Saxo Bank noted.

The dollar moved higher following the data, with the ICE dollar index last seen up 0.22 points to 100.99.

Treasury yields also widened, with the U.S. two-year note last seen paying 3.596%, up 3.5 basis points, while the yield on the 10-year note was up 2.7 basis points to 3.65%.