Investing.com -- Gold was relatively flat on Friday, in spite of a broadly strongly dollar pushed higher by the most robust monthly improvement in consumer sentiment in a decade.
On the Comex division of the New York Mercantile Exchange, gold for June delivery wavered between $1,264.900 and $1,277.65 an ounce, before settling at $1,272.35, up $1.15 or 0.09%. After two weeks rife with extreme volatility on global commodity markets, the precious metal has declined by roughly 1.7% from 15-month highs near $1,300 an ounce at the start of the month. Despite the recent downturn, gold is still up by more than 17% since the start of the year and is on pace for one of its strongest first halves in more than a decade.
Gold likely gained support at $1,063.20, the low from January 4 and was met with resistance at $1,322.10, the high from August 8, 2014.
On Friday morning, the University of Michigan's Consumer Survey Center said its Consumer Sentiment Index soared nearly seven points in its mid-May flash reading to 95.8, significantly above consensus expectations of 89.7. It came weeks after consumer sentiment slumped to 89.0 in the final April reading, dropping to its lowest level since last September. In the May reading, though, the expectations component surged nearly 10 points to 87.5, pulling up the general index. Over the last year, the sluggish expectations component has dragged down consumer sentiments overall.
Earlier on Friday, the U.S. Census Bureau said retail sales last month jumped by 1.3%, above consensus expectations of 0.9%, rebounding from a 0.3% decline in March. The overall reading received a lift from auto sales, which surged 3.2% on the month. Still, core retail sales, which discounted the effects of auto purchases, increased by 0.8% above analysts' forecasts for gains of 0.5%.
Investors also continued to react to a letter from Federal Reserve chair Janet Yellen to a member of the House Financial Services Committee on Thursday afternoon regarding the Fed's remote possibility likelihood of adopting a negative interest rate policy in the near future. In the letter addressed to Rep. Brad Sherman, Yellen said the Fed would not rule out the possibility of lowering rates into negative territory if an extremely adverse scenario arises in the coming months. Over the Federal Open Market Committee's (FOMC) first three meetings of 2016, the U.S. central bank has held its benchmark interest rate steady while central banks in Japan and the euro area have adopted negative interest rate regimes.
Any rate hikes by the Fed this year are viewed as bearish for gold, which struggles to compete against high-yield bearing assets in rising rate environments.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, jumped more than 0.65% to an intraday-high of 94.71. The index is still down 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 added 0.007 or 0.04% to $17.110 an ounce.
Copper for July delivery inched down 0.001 or 0.02% to $2.074 a pound.