. Price of gold fell more than two per cent , driven by higher dollar strengthened U.S. inflation

. Price of gold fell more than two per cent , driven by higher dollar strengthened U.S. inflation

 Gold futures on the COMEX division of the New York Mercantile Exchange fell more than two per cent on Tuesday (Wednesday morning GMT ) , giving back some of the previous day's gains on profit-taking .

The most active gold contract for June delivery lost 27.2 U.S. dollars , or 2.05 percent, to settle at 1300.3 dollars per ounce , erasing gains of 8.5 dollars on Monday , when prices closed at their highest level in three weeks , Xinhua reported .

The decline in gold on profit-taking before the Easter holidays , according to some market analysts , noting that large long position jangjka created on Monday as gold successfully traded above 1,320 U.S. dollars per ounce .

Also the overall strength in the U.S. dollar weighed on prices of dollar-denominated metals . The ICE Dollar Index traded higher so far this week , after rallying on Monday on U.S. retail sales better than expected .

The situation in eastern Ukraine failed to attract any purchase of " safe-haven " for gold . Some analysts believe that investors are bored with Ukraine . It will probably take a lot more cruel news to see a significant reaction that will lead to a runaway to gold for security .

The World Gold Council ( WGC ) said on Tuesday that after a record China gold demand in 2013 , this year will likely be a year of consolidation . But the medium-term demand for gold bars and coins can reach nearly 500 metric tons in 2017 , up nearly 25 percent over last year's record level .

Silver for May delivery fell 52.1 cents, or 2.60 per cent to close at 19.489 dollars per ounce .

The dollar rose against other major currencies on Tuesday ( Wednesday morning GMT ) , as data showed U.S. inflation rate increased in March .

Consumer Price Index ( CPI ) for all urban consumers U.S. increased 0.2 percent seasonally adjusted in March , the Labor Department said . The inflation rate in February was 0.1 percent , reported Xinhua .

The analysts believe these data add more signs of greater consumer demand and easing fears that inflation is too far below the Federal Reserve's target of 2.0 percent .

Meanwhile , U.S. confidence builder confidence in the market for new construction , single family homes , edged up one point to 47 in April from a downwardly revised 46 in March , according to the latest Housing Market Index by the National Association of Home Builders / Wells Fargo .

The U.S. dollar gained in the previous session , boosted by U.S. retail sales data were better than expected . The Commerce Department on Monday said U.S. retail sales rose 1.1 percent in March , the biggest gain in a year and a half .

In addition , the euro came under pressure after European Central Bank President ( ECB ) Mario Draghi said at the weekend that " further strengthening of the exchange rate will require further stimulus . "

In late New York trading , the euro fell to 1.3809 dollars from 1.3821 dollars in the previous session and the British pound fell to 1.6703 dollars from 1.6727 dollars . The Australian dollar slipped to 0.9355 dollars from 0.9413 dollars .

The dollar bought 101.83 yen , from 101.72 yen higher in the previous session . The dollar rose to 0.8804 Swiss franc from 0.8797 Swiss franc and rose to 1.0981 Canadian dollar from 1.0962 Canadian dollar in the previous session .