Investing.com - Gold futures fell from the prior session's one-month peak on Friday, as upbeat U.S. second quarter growth data added to expectations for a rate hike before the end of the year.
Gold for December delivery on the Comex division of the New York Mercantile Exchange slumped $8.20, or 0.71%, to end the week at $1,145.60 a troy ounce. Gold rallied to $1,156.40 on Thursday, the most since August 24, after a string of U.S. data painted a mixed picture of the health of the economy.
The Commerce Department said on Friday that the U.S. economy expanded 3.9% in the April-June quarter, up from an estimate of 3.7% reported last month, as stronger consumer spending and construction activity boosted growth.
The upbeat data eased concerns over the strength of the economy and supported the case for a U.S. interest rate hike this year, sending the greenback broadly higher
The dollar index rose 0.29% on Friday to close at 96.43, after hitting a daily high of 96.88, the strongest level since August 19. The index rose 1.5% on the week.
Federal Reserve Chair Janet Yellen said after markets closed on Thursday that she expected the central bank to begin raising rates later in 2015, as long as inflation remained stable and the U.S. economy was strong enough to boost employment.
It marked the first time Yellen personally supported a 2015 rate hike since July. Yellen's stance represents a stark contrast from her position last week when the Federal Open Market Committee only disclosed that 13 of 17 of its members were in favor of raising rates this year.
Despite Friday's losses, gold prices rose $8.40, or 0.69%, on the week, the second straight weekly gain, as market players continued to speculate over the timing of a Federal Reserve rate hike.
Gold prices have been well-supported since the Fed decided to leave short-term interest rates unchanged last week, amid concerns over soft inflation and the effects of recent market volatility on the U.S. economy.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has two more scheduled policy meetings before the end of the year, in late October and mid-December.
Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates for the first time since 2006 at some point this year.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Also on the Comex, silver futures for December delivery shed 1.9 cents, or 0.13%, on Friday to settle at $15.11 a troy ounce by close of trade. On the week, silver futures dipped 4.4 cents, or 0.32%.
Elsewhere in metals trading, copper for December delivery dropped 1.9 cents, or 0.83%, on Friday to settle at $2.283 a pound after touching a daily low of $2.277, the lowest level since August 26.
For the week, copper prices plunged 9.3 cents, or 4.38%, the biggest weekly drop since mid-January, as ongoing concerns over the health of China's economy dampened appetite for the red metal.
Private sector data released earlier in the week showed that manufacturing activity in China contracted at the fastest pace since the global financial crisis this month, fueling fears over slackening demand for the industrial metal.
Copper prices have been under heavy selling pressure in recent weeks as fears of a China-led global economic slowdown spooked traders and rattled sentiment. Prices of the red metal sank to a six-year low of $2.202 on August 24.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
In the week ahead, investors will be focusing on Friday’s U.S. jobs report for September, which could help to provide additional clarity on the likelihood of a near-term interest rate hike.
Market participants will also be watching Wednesday’s euro zone inflation report amid concerns that the European Central Bank could ramp up its monetary stimulus program.
Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 28
New York Federal Reserve President William Dudley and Chicago Fed President Charles Evans are both to speak, at separate events.
The U.S. is to release data on personal income and spending as well as a report on pending home sales.
Tuesday, September 29
The U.S. is to report on the trade balance and consumer sentiment.
Wednesday, September 30
The U.S. is to release the monthly ADP nonfarm payrolls report, as well as data on manufacturing activity in the Chicago region.
Later in the day, Fed Chair Janet Yellen is to speak at an event in St. Louis.
Thursday, October 1
China is to release reports on manufacturing and service sector activity from the China Federation of Logistics and Purchasing, as well as the Caixin services index and the revised reading of the Caixin manufacturing index.
The U.S. is to release a report on initial jobless claims and data on manufacturing activity from the Institute for Supply Management.
Friday, October 2
Markets in China are to remain closed for a national holiday.
The U.S. is to round up the week with the closely watched nonfarm payrolls report, and data on factory orders.