Investing.com - Gold prices edged lower on Friday after upbeat personal spending data bolstered the dollar by cementing expectations for the Federal Reserve to wind down monthly asset purchases this year and begin hiking benchmark interest rates in 2015, though bottom fishing trimmed losses.
Fed asset purchases, currently set at $55 billion a month, weaken the dollar to spur recovery, thus bolstering gold's appeal as a hedge as long as the Fed intervenes.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,294.50 a troy ounce during U.S. trading, down 0.02%, up from a session low of $1,286.40 and off a high of $1,299.40.
The June contract settled down 0.66% at $1,294.80 on Thursday.
Futures were likely to find support at $1,265.00 a troy ounce, the low from Feb. 10, and resistance at $1,343.00, the high from March 21.
The Commerce Department reported earlier Friday that U.S. personal spending rose 0.3% in February, in line with expectations. Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.
A separate report showed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations.
Elsewhere the revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 80.0 in March from 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.
Still the dollar rose, as the largely positive data came a day after economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.
Market sentiment remained firm that the Federal Reserve will continue winding down stimulus programs this year and begin raising benchmark interest rates from their current rock-bottom levels some time in 2015.
Meanwhile in the euro zone, preliminary data revealed that Germany's consumer price index rose 0.3% in March, missing expectations for a 0.4% increase, after a 0.5% gain in February.
The data softened the euro and sent investors to the dollar, a recipe for falling gold prices.
Bottom fishing trimmed gold's losses, as many investors viewed the commodity as oversold.
Meanwhile,silver for May delivery was up 0.41% at US$19.788 a troy ounce, while copper futures for May delivery were up 1.60% at US$3.041 a pound.