Investing.com - Gold prices fell towards last week's 11-month lows on Thursday, after data showed that the U.S. economy grew faster than initially estimated in the third quarter, notching its best performance in two years.
Gold for February delivery on the Comex division of the New York Mercantile Exchange dipped $3.00, or 0.25%, to $1,130.15 a troy ounce by 9:00AM ET (14:00GMT). Prices of the yellow metal sank to $1,124.30 last week, a level not seen since February 2.
The Commerce Department said the U.S. economy grew 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and improving from growth of 1.4% in the second quarter.
The report showed personal consumption rose 3.0% in the third quarter, up from an initial estimate of 2.7%. Consumer spending typically accounts for nearly 70% of U.S. economic growth.
A separate report showed that the number of Americans filing for unemployment benefits rose to a six-month high last week, while orders for big-ticket U.S. goods declined last month for the first time in five months.
The dollar turned higher in wake of the mostly upbeat data, bouncing back towards its 14-year-high against a basket of currencies with investors focused on the possibility of further U.S. interest rate hikes next year.
The dollar index inched up 0.1% to 103.14 in early trade. The index climbed to 103.62 on Tuesday, the strongest level since December 2002.
Market analysts warned that the outlook for gold remains cloudy in the near-term, given expectations for higher U.S. interest rates in the months ahead.
The Fed hiked interest rates for the first time in a year last week and projected three more increases in 2017.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.