Gold held steady on Tuesday above a one-month low hit in the previous session, as upbeat U.S. retail sales data appeared to undermine the necessity for stimulus measures and dented gold's appeal as a hedge against monetary easing.
Fundamentals
* Spot gold was little changed at $1,736.39 an ounce by 6 am IST, after falling to a one-month low of $1,728.75 in the previous session. It dropped 1 percent on Monday, its biggest one-day decline in three months.
* U.S. gold traded nearly flat at $1,738.20.
* U.S. retail sales rose in September as Americans stepped up purchases of everything from cars to electronics, a sign that consumer spending is driving faster economic growth.
* The data builds on recent signs of growing economic momentum, including a drop in the jobless rate last month and a rise in consumer spending.
* Federal Reserve officials offered divergent opinions on Monday about the correct stance for monetary policy, pitting a hawk against a dove over the inflation risk posed by the central bank's massive efforts to buoy U.S. growth.
* Investors fretted over Spain's bailout plan. Euro zone officials have said that Madrid could ask for financial aid next month and if it does the request would likely be dealt with alongside a revised loan programme for Greece and a bailout for Cyprus in one big package.
* Holdings of gold-backed exchange traded funds inched up to 74.991 million ounces by October 14 after two sessions of losses. The amount of gold by these ETFs rose to a record high of 75.03 million ounces last week.
Market news
* U.S. stocks climbed on Monday, rebounding from last week's losses after Citigroup's earnings and retail sales sharply exceeded expectations.
* The euro inched up on Tuesday, as investors awaited clarity on when Spain may request a bailout.