Investing.com - Gold prices fell on Friday, pulling away from the previous session's five-month highs hit following news the European Central Bank is launching a large scale quantitative easing program.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.44% to $1,295.00.
The February contract ended Thursday's session 0.54% higher at $1,300.70 an ounce.
Gold futures strengthened after the ECB announced on Thursday that it would launch a €60 billion monthly bond buying program that would start in March and last until September 2016, in a bid to stave off the threat of deflation in the euro area and boost growth.
In total, the program could total €1.08 trillion, much higher than market expectations for a figure of around €500 billion.
Commenting on the decision, ECB President Mario Draghi acknowledged the action the ECB took last year was “insufficient” to ward off the threat of deflation in the region. The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.
Draghi also said the risks to the euro area recovery remain to the “downside” but added that today’s action should bolster the outlook. He noted that lower oil prices should help households and support a wider recovery.
Elsewhere, data showed that the China HSBC Flash Manufacturing Purchasing Manager's Index came in at 49.8 in January, compared to December's final of 49.6, while the January flash output index ticked up to 50.1 from 49.9 in December, placing it just in expansion territory above 50.
China is the world's top physical consumer of gold.
Elsewhere in metals trading, silver for March delivery declined 0.60% to $18.245 a troy ounce, while copper futures for March delivery lost 1.14% to $2.550 a pound.