Investing.com - Gold futures edged lower on Thursday after a cheery report on U.S. retail sales boosted the dollar by keeping expectations firm that the Federal Reserve will begin hiking interest rates in 2015, possibly sooner than markets were once anticipating.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.11% at $1,228.10, up from a session low of $1,216.60 and off a high of $1,233.40.
The February contract settled down 0.21% at $1,229.40 on Wednesday.
Futures were likely to find support at $1,186.40 a troy ounce, Friday's low, and resistance at $1,239.00, Tuesday's high.
The U.S. Commerce Department reported earlier that retail sales rose 0.7% last month, beating expectations for a gain of 0.4%.
October's retail sales growth figure was revised up to 0.5% from 0.3%.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude volatile transportation items, advanced 0.5% in November, easily surpassing forecasts for a 0.1% increase. Core sales in October rose by 0.4%.
Retail sales correspond closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.
Thursday's retail sales numbers boosted expectations for the Federal Reserve to hike interest rates earlier in 2015 than once anticipated, which gave the dollar support over most major currencies and softened demand for gold.
Elsewhere, the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending Dec. 6 fell by 3,000 to 294,000, beating market calls for and increase to 299,000, which also supported the dollar by boosting optimism over the health of the U.S. labor market.
The number of Americans applying for new jobless benefits has held below the 300,000-level for 12 out of the past 13 weeks.
Continuing jobless claims in the week ended Nov. 29 rose to 2.514 million from 2.372 million in the preceding week. Analysts had expected continuing claims to fall to 2.360 million.
The four-week moving average was 299,250, an increase of 250 from the previous week’s total of 299,000. The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.
Elsewhere, silver for March delivery was down 0.69% at $17.068 a troy ounce, while copper futures for March delivery were up 0.80% at $2.917 a pound.