Gold prices edged lower on Tuesday as a stronger dollar and gains in stock markets amid optimism about U.S.-China trade talks took some shine off the yellow metal.
The dollar, which had turned weak amid speculation the Federal Reserve might pause monetary tightening this year, gained ground against most major currencies today, after the euro weakened on data showing an unexpected decline in German industrial output.
The dollar index gained more than 0.40% to 95.61 before retreating to around 95.45.
Gold futures for February ended down $4.00, or 0.3%, at $1,285.90 an ounce.
On Monday, gold futures settled at $1,289.90 an ounce, gaining $4.10, or 0.3% for the session.
Silver futures for March ended at $15.713 an ounce, down $0.043 from previous close.
Copper futures for March settled at $2.656 per pound, up $0.019 from yesterday's close.
The euro weakened after preliminary data from the Federal Statistical Office showed Germany's industrial production unexpectedly decreased for a third straight month in November, amid a sharp fall in consumer goods and energy output, worsening fears of a technical recession in the biggest euro area economy.
Overall industrial production fell a calendar and seasonally adjusted 1.9% from October, when it decreased 0.8%, revised from 0.5%, the data showed. Economists had expected a 0.3% increase. The latest decline was the biggest since a 2.3% slump in July.
Meanwhile, in a fresh sign that discussions are moving in the right direction, the U.S. and Chinese negotiators have reportedly agreed to extend trade talks until Wednesday. Earlier in the day, U.S. President Donald Trump tweeted, "Talks with China are going very well!"
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