Investing.com - Gold prices declined for the first time in six sessions on Thursday, but remained near a three-week high, as investors looked ahead to U.S. retail sales data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange shed $2.90, or 0.26%, to trade at $1,120.70 a troy ounce during European morning hours after hitting a session high of $1,126.30, the most since July 20.
The Commerce Department is expected to report at 8:30AM ET that retail sales rose by 0.5% in July, after falling 0.3% in June. Core sales are forecast to gain 0.4%, after dipping 0.1% a month earlier.
The U.S. is also to release data on initial jobless claims, import prices and business inventories later Thursday.
A day earlier, gold rallied $15.90, or 1.44%, to end at $1,123.60, the fifth straight daily gain, as China's surprise move to devalue its currency fanned hopes that the Federal Reserve could delay raising interest rates until the very end of 2015.
The People's Bank of China took initial steps to stabilize fluctuations in the yuan on Wednesday, one day after devaluing its currency by the highest amount in more than two decades.
The central bank said on Thursday that there was no basis for further depreciation in the yuan, in a bid to reassure jittery global markets.
China allowed the yuan to fall sharply this week to hit the lowest level since October 2012. The steep decline stoked concerns that China may allow the yuan to continue to depreciate, fueling fears over a currency war, as Beijing aims to make the nation's ailing exports more competitive on the global stage.
Some traders believe that the Fed could postpone raising interest rates as soon as September in response to China’s currency devaluation move, as officials are likely to remain concerned over global growth and inflation pressures.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded approximately 4.5% on hopes of a delayed U.S. rate hike.
Also on the Comex, silver futures for September delivery slumped 10.6 cents, or 0.68%, to trade at $15.37 a troy ounce.
Elsewhere in metals trading, copper for September delivery on the Comex division of the New York Mercantile Exchange inched up 1.1 cents, or 0.48%, to trade at $2.361 a pound during morning hours in London.
Copper slumped to a six-year low of $2.292 on Wednesday as growing concerns over the health of China's economy drove down prices.
Data released Wednesday showed that China's industrial production increased at an annual rate of 6.0% in July, disappointing expectations for a 6.6% gain.
Figures released over the weekend showed that Chinese exports dropped 8.3% in July, their biggest fall in four months, while producer prices fell to a six-year low.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.