Gold prices slipped on Tuesday as the dollar gained from rising bond yields and worries about China's economy. Markets are now anticipating U.S. retail sales data, which may provide insight into how higher rates would affect consumer purchasing.

Spot gold dipped 0.2% at $1,904.50 per ounce meanwhile gold futures slipped 0.4% to $1,937 per ounce.

At this point, there may be an increase in the possibility of short-covering as the decrease in gold has reached an oversold level.

Amid concerns over China's economy, the U.S. dollar remained close to its peak in more than a month, making gold more expensive for foreign purchasers.

Tuesday saw an unexpected reduction in key policy rates by China's central bank as the country's second-largest economy's industrial output and retail sales growth stalled and fell short of expectations.

According to NAB Commodities Research, investors were considering possible policy moves from Chinese regulators to handle increasing financial and property risk as gold prices declined as the U.S. dollar and Treasury yields were driven higher.

The focus is now shifting to U.S. retail sales statistics that will be released later today.