Investing.com - Gold prices inched up modestly on Friday, as traders continued to mull the timing of a Federal Reserve rate hike in their quest to gauge the metal’s appeal.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery tacked on $1.00, or 0.08%, to settle at $1,189.80 a troy ounce by close of trade. A day earlier, prices slumped to $1,180.20, the lowest since May 11.
Futures were likely to find support at $1,180.20, the low from May 28, and resistance at $1,208.90, the high from May 26.
Official data released Friday showed that the U.S. economy contracted 0.7% in the first three months of 2015, compared to an initial estimate of growth of 0.2%. The downward revision was broadly in line with analysts' expectations.
Despite the disappointing reading, most market experts expect the U.S. economy to rebound in the second quarter, as transitory factors recede.
For the week, prices of the precious metal lost $16.50, or 1.25%, the second straight weekly decline, amid growing expectations that the Federal Reserve would raise interest rates after the summer.
Economic data released in the past week, including reports on inflation, new home sales, business investment and consumer confidence all indicated that the economy is gaining momentum after a slowdown in the first quarter, supporting the case for higher interest rates later this year.
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 U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.2% on Friday to end at 96.94, moving further way from Wednesday’s five-week peak of 97.88.
Despite Friday's losses, the dollar still rose 0.9% on the week after Federal Reserve Chair Janet Yellen said last week that the central bank still expects to start raising interest rates later this year if the economy continues to improve as expected.
Also on the Comex, silver futures for July delivery ended Friday's session at $16.70 a troy ounce, up 3.2 cents, or 0.19%. Silver fell to $16.54 on Thursday, the weakest level since May 13.
On the week, silver prices declined 34.9 cents, or 2.05%, the second consecutive weekly loss.
Elsewhere in metals trading, copper for July delivery tumbled 3.9 cents, or 1.43%, on Friday to settle at $2.728 a pound after hitting a daily low of $2.724, a level not seen since April 24.
For the week, prices of the red metal dropped 7.2 cents, or 2.95%, the second straight weekly decline, amid mounting concerns over the health of China's economy.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.