Investing.com - Gold prices declined in European morning hours on Friday, after rising to three-month highs in the previous session as the dollar regained some strength ahead of upcoming U.S. economic reports.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.40% at $1,220.30.
The June contract ended Thursday's session 0.57% higher at $1,225.20 an ounce.
Futures were likely to find support at $1,190.40, the low from May 13 and resistance at $1,227.70, Thursday's high.
On Thursday, the Department of Labor said the number of Americans filing claims for initial jobless benefits in the week ending May 9 fell by 1,000 to 264,000, coming in just above the 15 year low reached two weeks ago, indicating that the recovery in the labor market is continuing.
But the data was overshadowed by another report showing that the U.S. producer price index fell 0.4% last month and was 1.3% lower on a year-over-year basis, the largest drop since 2010.
The weak inflation data reinforced expectations that the Federal Reserve will hold off on raising interest rates until the economic recovery is on a stronger footing, sending the greenback lower.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.07% to 93.57 in early European trade, off Thursday's four-month lows of 93.16.
Investors were now looking ahead to reports on U.S. industrial production, manufacturing activity in the New York region and consumer sentiment, due later in the day, for further indications on the strength of the economy.
Elsewhere in metals trading, silver futures for July delivery slid 0.30% to $17.408 a troy ounce, while copper futures for July delivery edged up 0.19% to $2.929 a pound.
Copper prices remained supported amid mounting speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.