Investing.com -- Gold futures fell slightly on Friday retreating from monthly highs, as optimistic U.S. economic data and hawkish comments from Federal Reserve chair Janet Yellen on a likely 2015 interest rate hike weighed on the precious metal.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a range between $1,140.30 and $1,153.80, before settling at $1,145.40, down 8.40 or 0.73% on the session. A day earlier, gold futures surged more than $20 an ounce for its strongest one day performance of September amid soft durable good orders last month. For the week, gold soared more than 3% after opening on Monday below $1,130 an ounce.
Gold likely gained support at $1,140.30, the low from Sept. 14 and was met with resistance at $1,153.80, the high from Sept. 24.
Gold may be headed for an extended downturn after Yellen said on Thursday evening that the U.S. central bank will likely support raising the target range for its benchmark Federal Funds Rate at some point this year. 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.
The Federal Funds Rate, the rate at which banks use to lend to other institutions on overnight loans, has remained at its current "zero-bound level," since December, 2008. An interest rate hike is viewed as bearish for the precious metal. Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in rising rate environments.
Yellen also noted that the inflation shortfall is likely to be transitory, as one-off factors such as lower energy prices and weaker imports due to a stronger dollar abate. Yellen added that inflation should reach the Fed's 2% target when the labor market returns to full employment. Long-term inflation has remained under the Fed's goal for every month over the last three years.
The FOMC is expected to take a "data-driven approach," in determining whether it should wait until October or December for lift-off.
On Friday, the U.S. Department of Commerce said the nation's Real Gross Domestic Product for the second quarter increased by 3.9% on an annual basis, above consensus estimates of a 3.7% gain. Real GDP measures the value of the goods and services produced by the nation's economy less the value of the goods and services used in production adjusted for inflation. The acceleration in Real GDP over the quarter reflects an uptick in export levels, the Commerce Department's Bureau of Economic Analysis said in a statement.
Separately, the University of Michigan's Consumer Survey Center said its consumer sentiment index ticked up to 87.2 for September, up from a preliminary reading of 85.7. Analysts expected a final reading of 87.1 for the month.
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% on Friday to an intraday high of 96.88. The index surged to its highest level since mid-August. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for December delivery lost 0.030 or 0.20% to 15.100 an ounce.
Copper for December delivery dipped 0.18 or 0.77% to 2.284 a pound.