Investing.com - Gold prices edged lower on Friday after an upbeat report on U.S. consumer sentiment sparked demand for the dollar, though bottom fishers snapped up nicely priced position in the yellow metal and cushioned losses.
Gold and the greenback tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,242.00 a troy ounce during U.S. trading, down 0.04%, up from a session low of USD1,238.40 and off a high of 1,254.70.
The April contract settled down 1.56% at USD1,242.50 on Thursday.
Futures were likely to find support at USD1,237.90 a troy ounce, Thursday''s low, and resistance at USD1,270.10, Wednesday''s high.
In the U.S., the Thomson Reuters/University of Michigan final index of sentiment came in at 81.2 in January, beating expectations for a 81.0 reading.
Also in the U.S. official data revealed consumer spending rose 0.4% in December, beating expectations for a 0.2% reading, though personal income came in unchanged, missing expectations for a 0.0% gain.
The numbers supported expectations for the Federal Reserve to continue winding down its monthly bond-buying program this year.
Currently, the Fed is buying USD65 billion in Treasury and mortgage debt a month from banks, which weakens the dollar to spur recovery, making gold an attractive hedge.
The program began in 2012, starting out at USD85 billion in Fed asset purchases a month.
Solid U.S. data in recent weeks have pushed gold prices lower, though bottom fishers viewed the commodity as an attractive buy on Friday
Meanwhile, silver for March delivery was up 0.12% and trading at USD19.148 a troy ounce, while copper futures for March delivery were down 0.66% and trading at USD3.205 a pound.