Investing.com - Gold declined for the first time in eight sessions on Friday, as a rebound in the U.S. dollar prompted investors to lock in gains from a recent rally.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery dipped $5.00, or 0.41%, to settle at $1,200.70 a troy ounce by close of trade. Futures were likely to find support at $1,179.40, the low from March 23, and resistance at $1,220.40, the high from March 26.
A day earlier, gold rallied to $1,220.40, the most since March 2, after Saudi Arabia launched air strikes in Yemen, while the U.S. dollar weakened.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.1% to 97.65 by late Friday. On Thursday, the index fell to 96.30.
Gold traders have been monitoring the direction of the dollar in recent months to gauge the appeal of the precious metal. Prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.
The dollar showed little reaction after Federal Reserve Chair Janet Yellen struck a cautious note on interest rates. In a speech, the Fed chief said a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay.
The speech echoed the Fed’s latest policy statement, released on March 18, which indicated that it may raise interest rates more gradually than markets had expected.
Meanwhile, the Commerce Department reported Friday that the U.S. economy expanded at an annual rate of 2.2% in the fourth quarter, unchanged from the preliminary estimate and below economists’ forecasts for an upward revision to 2.4%.
Another report showed that the final reading of the University of Michigan’s consumer sentiment index ticked down to 93.0 this month from a final reading of 95.4 in February.
On the week, gold prices picked up $16.60, or 1.28%, the second straight weekly gain, amid expectations U.S. interest rates will rise at a slower pace than previously thought.
Gold fell to a four-month low of $1,141.60 on March 17 on concerns that the Fed will start raising rates as early as in June.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Elsewhere on the Comex, silver futures for May delivery shed 7.1 cents, or 0.41%, on Friday to settle at $17.06 a troy ounce by close of trade. On Thursday, prices touched $17.40, the highest level since February 17.
For the week, the May silver futures contract tacked on 31.4 cents, or 1.1%, the second consecutive weekly gain.
Also in metals trading, copper for May delivery slumped 4.3 cents, or 1.55%, on Friday to end at $2.767 a pound.
Despite Friday's losses, Comex copper rose 0.7 cents, or 0.25%, on the week, the third straight weekly advance, amid speculation demand for the industrial metal will increase due to accommodative central bank policies in the U.S., Europe and China.
In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 30
The U.S. is to release reports on personal spending and pending home sales.
Tuesday, March 31
The euro zone is to release preliminary data on consumer inflation and the monthly employment report.
The U.S. is to release data on consumer confidence.
Wednesday, April 1
China is to publish its official manufacturing index and the revised reading of the HSBC (LONDON:HSBA) manufacturing index.
The U.S. is to release the ADP nonfarm payrolls report, which outlines private sector jobs growth, while the Institute of Supply Management is to release data on manufacturing activity.
Thursday, April 2
The U.S. is to release data on weekly initial jobless claims, as well as reports on the trade balance and factory orders.
Friday, April 3
The U.S. is to round up the week with what will be a closely watched government report on non-farm payrolls, the unemployment rate and average earnings.
Meanwhile, markets in Australia, New Zealand, Europe, the U.K. and Canada will be closed for the Good Friday holiday.