Investing.com - Gold prices edged lower on Friday after upbeat U.S. data fueled speculation that the Federal Reserve will make fresh cuts to its bond-buying program at a policy meeting next week, with added hopes that language may hold clues as to when rates may rise also pushing the yellow metal lower.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,229.10 a troy ounce during U.S. trading, down 0.80%, up from a session low of $1,228.20 and off a high of $1,242.20.
The December contract settled down 0.51% at $1,239.00 on Thursday.
Futures were likely to find support at $1218.60 a troy ounce, the low from Jan. 8, and resistance at $1,279.20, last Thursday's high.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to a 14-month high of 84.6 this month from 82.5 in August. Analysts had expected the index to rise to 83.3 in September.
The report came after official data showed that U.S. retail sales rose 0.6% last month, in line with expectations. Retail sales for July were revised to a 0.3% gain from a previously estimated flat reading.
Core retail sales, which exclude automobiles, increased by 0.3% in August, also in line with market expectations and growing at the fastest pace since April. July's figure was revised to a 0.3% gain from a previously estimated 0.1% rise.
Friday's data fueled already growing expectations that the Federal Reserve will hike interest rates earlier than markets were expecting, with tightening seen taking place now in mid-2015.
A study released by the San Francisco Feb on Monday indicated that central bank officials see rates rising sooner than markets expect.
Loose monetary policies such as stimulus programs bolster gold due to its appeal as a hedge to a weaker dollar, while talk of tightening has the opposite effect.
The Fed's monthly bond-buying program currently stands at $25 billion, though markets are expecting that figure to fall to $15 billion at next week's meeting and close in October.
Investors also hope the Fed's Sept. 17 statement on monetary policy will hold clues as to when rates may rise.
Meanwhile, silver for December delivery was down 0.09% at $18.583 a troy ounce, while copper futures for December delivery were up 0.27% at $3.101 a pound.