Investing.com - Gold futures inched up modestly on Friday, but still posted a weekly loss as ongoing expectations for a sooner than expected rate hike in the U.S. and a broadly stronger dollar and weighed.
On the Comex division of the New York Mercantile Exchange, gold for December delivery tacked on $2.70, or 0.22%, to settle at $1,231.80 a troy ounce by close of trade.
Despite Friday's upbeat performance, Comex gold prices lost $7.20, or 0.58%, on the week, the first weekly decline in three weeks.
Futures were likely to find support at $1,222.00, the low from October 15, and resistance at $1,255.60, the high from October 21.
A recent batch of stronger than expected U.S. economic data indicated that the economic recovery maintained momentum and underlined speculation that the Federal Reserve could hike interest rates sooner than expected.
Rate hikes tend to dampen gold prices as it increases the relative cost of holding on to the metal.
The U.S. dollar was boosted amid mounting expectations the Fed will remove accommodation sooner than previously thought.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, ended the week up 0.55% at 85.79.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up asset purchases under its third round of quantitative easing.
Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending October 21.
Net longs totaled 75,273 contracts, up 30.9% from net longs of 51,994 in the preceding week.
Also on the Comex, silver for December delivery picked up 2.4 cents, or 0.14%, on Friday to settle the week at $17.33 a troy ounce by close of trade.
On the week, the December silver futures contract lost 15.0 cents, or 0.86%, following two consecutive weekly rises.
Data from the CFTC showed that net silver shorts totaled 8,637 contracts as of last week, compared to net shorts of 9,089 contracts in the preceding week.
Elsewhere in metals trading, copper for December delivery rose 0.1 cents, or 0.03%, at $3.041 a pound by a close of trade. Futures hit a session high of $3.059 earlier, the most since October 15.
Comex copper prices advanced 3.8 cents, or 1.24%, on the week as hopes for additional monetary stimulus in the euro zone and China boosted the outlook for future demand prospects.
Copper is sensitive to the economic growth outlook because of its widespread uses across industries.
According to the CFTC, net copper shorts totaled 11,942 contracts as of last week, compared to net shorts of 11,375 contracts in the preceding week.