Gold edged toward $4,400 an ounce as traders weighed the Federal Reserve's interest-rate path after the economy's main engine showed signs of cooling. The latest US data showed declines in both consumer sentiment and retail sales, helping ease fears of an imminent rate hike.

The University of Michigan's preliminary August sentiment index slid to 51, below the median forecast of 55, while retail sales dropped in July by the most in more than a year. Still, the risk of monetary tightening remains as oil prices climbed after the US threatened economic measures on Iran. Federal Reserve Bank of Chicago President Austan Goolsbee said he's encouraged by recent cooling inflation but wants to see more data to confirm it's falling back to the 2% target.

Gold's recovery above the key $4,000-an-ounce threshold has been driven by renewed investor appetite and increased central bank purchases, notably from China. Gains earlier this week took the metal above its 100-day moving average for the first time since April, though it has since returned below. "The macro setup has turned more constructive, although positioning is less supportive and technical momentum is starting to look stretched after the recent rebound," said Christopher Wong, a strategist at Oversea-Chinese Banking Corp.

Spot gold traded 0.6% higher at $4,374.24 an ounce in New York. Silver rose 0.3% to $64.66 an ounce. The Bloomberg Dollar Spot Index slipped 0.2%.