Investing.com - Gold futures traded slightly lower on Friday after a better-than-expected report on U.S. consumer sentiment bolstered the dollar, though concerns the global economy is battling headwinds gave the precious metal some support.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,239.80 a troy ounce, down 0.11%, up from a session low of $1,232.20 and off a high of $1,242.10.
The December contract settled down 0.29% at $1,241.20 on Thursday.
Futures were likely to find support at $1,222.00 a troy ounce, Wednesday's low, and resistance at $1,245.60, Thursday's high.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to a seven-year high 86.4 for October from 84.6 in September. Analysts had expected the index to slip to 84.1 in October, and the surprise firmed the dollar and sent gold prices falling amid sentiments that the Federal Reserve will likely close its bond-buying program this month and hike interest rates in 2015.
Elsewhere, the Census Bureau reported earlier that U.S. building permits rose 1.5% to 1.018 million in September, disappointing expectations for an increase of 2.8% to 1.0.29 million units, after a 5.1% drop to 1.003 million units in August.
The report also showed that U.S. housing starts rose 6.3% in September to 1.017 million units, beating expectations for a 4.8% gain. Housing starts for August were revised to a 12.8% fall from a previously estimated 14.4% decline.
Despite the overall positive U.S. data, gold's losses were limited, as concerns persisted that cooling European and Asian economies may drag on U.S. recovery and convince the Fed to raise interest rates later than once anticipated.
Official data released on Wednesday showed that Chinese inflation for September slowed to 1.6% on-year from 2.0% in August, below expectations for a reading of 1.7%.
The weaker-than-expected data underlined concerns about China's economy and sparked speculation policymakers in Beijing will have to introduce fresh stimulus to meet the government's 7.5% growth target.
In Europe this week, revised data showed that bloc's consumer price index rose by 0.3% in September, in line with expectations though soft nonetheless.
The rate has now been below 1% for 12 straight months, well under the European Central Bank's target of near but just under 2%.
Meanwhile, silver for December delivery was down 0.57% at $17.337 a troy ounce, while copper futures for December delivery were up 0.71% at $3.003 a pound.