Investing.com - Gold futures fell on Tuesday after Federal Reserve Chair Janet Yellen delivered an reasonably upbeat take on the U.S. economy before Congress earlier, with concerns that momentum stocks have grown a bit frothy bolstering the dollar, which trades inversely with gold
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,294.60 a troy ounce during U.S. trading, down 0.93%, up from a session low of $1,293.10 and off a high of $1,314.50.
The August contract settled down 2.30% at $1,306.70 on Monday.
Futures were likely to find support at $1,258.00 a troy ounce, the low from June 17, and resistance at $1,340.90, Monday''s high.
Yellen told the Senate Banking Committee earlier that the U.S. economy continues to improve but added that the recovery is not yet complete. She said that considerable slack still remains in the labor market and wage growth remains weak.
Yellen reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends, though her observation that small-cap, biotech and other momentum stock valuations appear "stretched" gave the dollar support, leaving investors to conclude that interest rates could rise sooner than later if the labor market improves, which sent gold falling.
Yellen''s comments overshadowed mixed U.S. data, which depicted an economy that continues to recover albeit on a road with lingering potholes.
The Commerce Department reported that U.S. retail sales rose just 0.2% in June, below forecasts for a 0.6% increase. Retail sales for May, however, were revised up to 0.5% from a previously reported 0.3%.
A separate report showed that manufacturing activity in New York state rose to a four-year high this month. The Empire state manufacturing index rose to 25.6 in July from 19.3 in June. Analysts had expected the index to decline to 17.0.
Meanwhile, silver for September delivery was down 0.63% at $20.783 a troy ounce, while copper futures for September delivery were unchanged at $3.250 a pound.