Investing.com - Gold prices declined on Friday, as Thursday's strong U.S. economic reports fuelled further expectations for the Federal Reserve to raise interest rates sooner-than-expected, sending the dollar broadly higher.
On the Comex division of the New York Mercantile Exchange, gold for February delivery traded at $1,220.80 a troy ounce during European morning trade, down 0.39%.
The December contract settled 0.31% lower on Thursday to end at $1,225.6 a troy ounce.
Futures were likely to find support at $1,199.50, the low from December 9 and resistance at $1,238.90, the high from December 10.
The dollar strengthened after the U.S. Commerce Department reported on Thursday that retail sales rose 0.7% last month, beating expectations for a gain of 0.4%. October's retail sales growth figure was revised up to 0.5% from 0.3%.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude volatile transportation items, advanced 0.5% in November, easily surpassing forecasts for a 0.1% increase. Core sales in October rose by 0.4%.
Retail sales correspond closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.
Thursday's retail sales numbers boosted expectations for the Federal Reserve to hike interest rates earlier in 2015 than once anticipated, which gave the dollar support over most major currencies and softened demand for gold.
Separately, the U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending December 6 fell by 3,000 to 294,000, beating market calls for and increase to 299,000, which also supported the dollar by boosting optimism over the health of the U.S. labor market.
The number of Americans applying for new jobless benefits has held below the 300,000-level for 12 out of the past 13 weeks.
Continuing jobless claims in the week ended Nov. 29 rose to 2.514 million from 2.372 million in the preceding week. Analysts had expected continuing claims to fall to 2.360 million.
Elsewhere in metals trading, Comex, silver for March delivery slid 0.43% to $17.035 a troy ounce, while March copper dipped 0.02% to trade at $2.921 a pound.