Gold prices fell on Friday after better-than-expected U.S. employment and consumer sentiment reports hit the wire and fanned widespread expectations for the Federal Reserve to begin paring back stimulus programs in early 2014.
Stimulus tools such as the Fed''s USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar in the process, and talk of their dismantling often strengthens the greenback.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,230.30 during U.S. afternoon hours, down 0.13%.
Gold prices hit a session low of USD1,211.20 a troy ounce and high of USD1,243.30 a troy ounce.
Gold futures were likely to find support at USD1,211.10 a troy ounce, Wednesday''s low, and resistance at USD1,250.80, Wednesday''s high.
The February contract settled down 1.23% at USD1,231.90 a troy ounce on Thursday.
Gold slumped after the Department of Labor said the U.S. economy added 203,000 jobs in November, beating expectations for a 180,000 increase and up from a downwardly revised 200,000 rise the previous month.
In the private sector, 196,000 jobs were added last month, compared to expectations for a 180,000 rise, after an increase of 214,000 in October.
The report also said the U.S. unemployment rate fell to 7.0% in November from 7.3% in October, beating expectations for a downtick to 7.2%.
Also on Friday, data revealed the preliminary Thomson Reuters/University of Michigan consumer sentiment index increased to 82.5 in December from 75.1 the previous month, far surpassing expectations for a 76.0 reading.
The data kept expectations in place that the Federal Reserve will begin scaling back its USD85 billion in monthly bond purchases, which have supported gold prices for a year.
Elsewhere on the Comex, silver for March delivery was down 0.24% at USD19.523 a troy ounce, while copper for March delivery was up 0.46% and trading at USD3.244 a pound.
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