Investing.com -- Gold inched down on Friday remaining near three-month lows as moderate upward revisions to first quarter U.S. GDP helped boost the dollar, ahead of a closely-watched speech by Federal Reserve chair Janet Yellen at Harvard University.
On the Comex division of the New York Mercantile Exchange, gold for June delivery traded between $1,210.00 and $1,223.20 an ounce before settling at $1,212.95, down $7.45 or 0.61% on the session. For the week, gold tumbled more than 2.5% extending losses from a week earlier when the Fed triggered a sell-off with strong suggestions that it could raise interest rates when it meets again next month. Since hitting 15-month highs around $1,300 an ounce at the start of May, gold has plunged more than 5% and $75 an ounce. Nevertheless, the precious metal is still holding onto massive gains from the first quarter is on pace for one of its strongest first halves of a year in more than a decade.
Gold likely gained support at $1,125.00, the low from February 3 and was met with resistance at $1,304.40, the high from May 2.
On Friday morning, the U.S. Commerce Department revised prior estimates of first quarter GDP higher by 0.3% to 0.8% on an annual basis, slightly below consensus forecasts of 0.9%. Though residential investment and exports helped drive growth, non-residential investment and government purchases continued to lag. In addition, soft personal consumption data could compel the Fed to adjust the timing of its next rate hike. In its latest estimates, the Commerce Department lowered the GDP price index for the first quarter by 0.1 to 0.6% on a year over year basis. Analysts expected to see a flat reading of 0.7%.
Also on Friday, the University of Michigan's Consumer Survey Center said consumer sentiment fell 1.1 points in May from the flash reading when it surged nearly 7 points to 95.8, the strongest monthly improvement in a decade. Despite the slight pullback, consumer sentiment is still at its highest level in more than a year.
Yellen will make her first public appearance in nearly two months at a ceremony when she receives the Radcliffe Medal from Harvard University's Radcliffe Institute for Advanced Study on Friday afternoon. The Fed chair could provide further hints on the pace of the U.S. central bank's long-term rate path in a Question-And-Answer session with Harvard economics professor Gregory Mankiw after the presentation. Over the last two months, Yellen has reiterated that the Fed will raise rates gradually in the current cycle, amid widespread volatility in global financial markets and persistently low inflation.
Analysts from Morgan Stanley (NYSE:MS) warned in a report that an imminent rate hike from the Fed would be a "mistake," due primarily to lower than expected first half growth and "abundant downside risks" to the economy. Earlier this week, strategists at the Wall Street firm said they expect the Federal Open Market Committee (FOMC) to raise short-term interest rates next at their monetary policy meeting in December, the last time the FOMC will meet this year. A gradual rate path is bullish for gold, which struggles to compete with high yield bearing assets when rates increase rapidly.
Gold's recent downturn can also be attributed to a rally among global equities, which has dampened enthusiasm for gold as a safe-haven asset. The Euro Stoxx 600 Index inched up on Friday to close at 3,078.48 ending the session up approximately 3% for the week. On Wall Street, the three major indices were all on pace to close with their strongest week in more than two months.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.4% to an intraday high of 95.60. The index is still down by more than 4% since early-December. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for July delivery fell 0.083 or 0.51% to $16.260 an ounce.
Copper for July delivery inched up 0.010 or 0.45% to $2.112 a pound.