Gold prices fell overnight after better-than-expected US retail sales data lowered the likelihood of an aggressive interest rate cut by the US Federal Reserve in investors’ eyes, boosting the US dollar.

Spot gold inched down 0.4 per cent to $US1,408.74 per ounce.

US gold futures settled about 0.2 per cent lower at $US1,411.20.

“The (gold) market is more reliant on the macro factors to be driven higher. If we continue to see stronger data like the retail numbers, it presents a headwind for the market,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.

“The key event the market is tracking is the July FOMC meeting and the Fed rate cut expectations, and we have seen that the expectations have declined a little bit.”

The US Commerce Department said retail sales rose 0.4 per cent last month as households stepped up purchases of cars and a variety of other goods.

The US dollar rose 0.5 per cent against major rivals on the upbeat US data, making greenback-denominated assets costlier for investors holding other currencies.

“We’ve seen a return to big-news-is-bad-news scenario whereby a strong piece of data, which could discourage the US Fed from cutting interest rates, is having big implications on the market,” OANDA senior market analyst Craig Erlam said.

Meanwhile, spot palladium fell more than three per cent to touch its lowest in three weeks at $US1,510 per ounce.

The metal was last down about 3.3 per cent at $US1,516.43 per ounce.

US President Donald Trump said his country still has a long way to go to conclude a trade deal with China but could impose tariffs if needed.

Trump earlier said that slowing economic growth in the world’s second largest economy showed US tariffs were having “a major effect” and the US could add pressure.

“(The drop in prices) are due to a combination of weak economic growth in China along with a technically driven sell-off after reaching a strong level of resistance,” David Meger, director of metals trading at High Ridge Futures said, adding Trump’s comments were an “added negative”.

The auto-catalyst metal briefly surpassed a key psychological level of $US1,600 on Thursday, a level last touched in March.

The failure to sustain above the recent high has caused a bout of profit taking, Meger said.

Among other precious metals, silver rose 1.5 per cent to $US15.62 per ounce, after touching its highest since February 28 at $US15.69 earlier in the session.

Platinum was up 0.2 per cent at $US840.98, after touching its highest since May 15 at $US850.62.