Investing.com - Gold futures dipped modestly on Friday, but still ended the week up nearly 3% as investors sought shelter from steep losses in oil and equity markets, amid lingering fears of a global economic slowdown.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery declined $3.10, or 0.25%, to settle at $1,222.50 a troy ounce by close of trade.
Despite Friday's modest losses, gold prices rose 2.62%, or $32.10, on the week, the biggest weekly gain since June.
Futures were likely to find support at $1,199.50, the low from December 9, and resistance at $1,238.50, the high from December 9.
Also on the Comex, silver futures for March delivery shed 5.5 cents, or 0.32%, on Friday to settle the week at $17.05 a troy ounce by close of trade.
The March silver futures contract climbed 80.0 cents, or 4.69%, on the week, the second consecutive weekly gain.
Oil prices continued to tumble on Friday, to hit the lowest level since 2009, as investors piled on to their short positions in anticipation of lower prices into the new year amid concerns over a growing supply glut.
London-traded Brent prices declined $1.83, or 2.87%, to close at $61.85 a barrel, while Nymex oil futures dropped $2.14, or 3.57%, to end at $57.81, a level not seen since May 2009.
The International Energy Agency, the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration all cut their estimates for oil-demand growth last week, fuelling concerns over a slowdown in global demand.
Meanwhile, global equity markets tumbled on Friday as shares in oil-related firms came under heavy pressure.
The Dow 30 closed the week down 3.8%, the worst weekly loss since November 2011, while S&P 500 fell 3.5%, its biggest weekly decline since May 2012.
European stock markets also closed sharply lower on Friday, posting their biggest weekly loss since August 2011.
Gold’s appeal as a safe-haven is boosted during times of economic uncertainty.
Despite recent gains, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The preliminary reading of the University of Michigan's consumer sentiment index released Friday rose to 93.8, the highest level since January 2007 and ahead of forecasts of 89.7.
Consumer sentiment was boosted by the improving outlook for employment and wage growth and lower gasoline prices.
In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.
Elsewhere in metals trading, copper for March delivery tacked on 1.3 cents, or 0.45%, on Friday to settle at $2.934 a pound, after disappointing data from China fanned expectations for more stimulus.
On the week, Comex copper advanced 3.2 cents, or 1.09%, the second straight weekly rise.
Official data released Friday showed that industrial production in China rose 7.2% in November, missing expectations for an increase of 7.5% and slowing from a 7.7% gain in October.
The weak data added to fears that China will miss its annual growth target of 7.5% and boosted speculation that the government will need to roll out fresh stimulus measures to avert a sharper slowdown.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.