According to the latest data available, the gold prices have fallen following reports suggesting higher consumer sentiment and recovery in the economy.

Data showed that Gold for August delivery was trading $10.90 down at $1,317.90 an ounce at the COMEX division of the New York Mercantile Exchange. The gold price was touched a high of $1,350.50 and as low as $1,311.90 an ounce while the spot price fell $14.63 in the market.

A new report showing Reuter's/University of Michigan consumer sentiment index rose 85.1 in July compared to 83.9 in June. The rating of 85.1 is highest for the month since July of 2007 indicating that the economy is recording a stable recovery this year. Faster growth could make gold a less attractive investment option for investors.

The US Federal Reserve Ben S. Bernanke had indicated the central authority will reduce its $85 billion of monthly asset purchases this year and conclude the entire stimulus package by 2014 as the US economy shows signs of recovery. The prices were also affected by a rising dollar due to concerns that the Federal Reserve might start rolling back its stimulus package this year.

The stimulus package by the Federal Reserve have been able to keep the interest rates low and this convinced investors to buy gold as a hedge against perceived risks including higher inflation and a weaker dollar. Gold prices are now expected to fall as the federal Reserve will start the rollback of its fiscal stimulus package during the coming years.