On Wednesday, the greenback strengthened as concerns about a downturn in the Chinese economy and rising interest rates kept gold prices steady and on the verge of dropping below important levels. Meanwhile, copper prices fell to their lowest level in two months.

Spot gold steadied at $1,902.24 per ounce, meanwhile gold futures slumped 0.1% to $1,933.40 per ounce.

According to U.S. retail sales figures came out on Tuesday, consumer spending in the nation remained strong, possibly pointing to further inflationary pressures in the months to come.

Investors flocked to the dollar instead of safe haven assets like gold and precious metals as a result of this idea and deteriorating risk sentiment in the wake of indications of a Chinese economic slowdown.

The Federal Reserve has a hawkish short-term perspective, according to Tuesday's retail sales figures, which released post solid inflation figures for July.

If inflation stays stubborn, the central bank has issued a warning that interest rates could increase further from their over 20-year highs. A scenario like this is bad news for non-yielding assets like gold and other metals since it increases their potential cost.