Investing.com - Gold prices dropped to four-year lows in early European trade on Friday, as strong U.S. data released on Thursday and speculation over an early rate hike by the Federal Reserve weighed on demand for safe-haven precious metal.
On the Comex division of the New York Mercantile Exchange, gold for December delivery traded at $1,172.20 a troy ounce during European morning trade, down 2.20%.
The December contract settled 2.15% lower on Thursday to end at $1,198.6 a troy ounce.
Futures were likely to find support at $1,158.70 and resistance at $1,202.40, the session high high.
Gold prices dropped to the lowest level since July 2010 as signs the U.S. economic recovery is on track fuelled fresh speculation the Fed could raise interest rates earlier than expected.
The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 3.5% in the three months to September, beating forecast for 3%.
But consumer spending slowed to 1.8% from 2.5% in the second quarter, and fixed investment spending also declined from the previous quarter, pointing to slackening domestic demand.
A separate report showed that the number of Americans filing new claims for jobless benefits rose for a second week last week, but underlying trends still pointed to a recovery in the labor market.
Gold was also hit after the U.S. central bank announced on Wednesday that it was ending its monthly bond-buying program due to improvements taking place in the labor market.
Elsewhere in metals trading, Comex, silver for December delivery plummeted 2.62% to $15.995 a troy ounce, while December copper gained 0.77% to trade at $3.086 a pound.