Gold Futures Turn Lower

Updated from 12:18 p.m. EST

A choppy gold market eventually succumbed to selling pressure Thursday following a mixed bag of economic data.

April-dated bullion contracts fell $7.40 to close at $665.10 an ounce on the Comex division of the New York Mercantile Exchange. Earlier in the session, prices rallied to a peak of $676.10 before reversing.

The exchange-traded funds that hold the metal, streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust (IAU Quote), both lost about 1%.

"I think we've had a string of conflicting news that's buffeted the gold market all week," says Jon Nadler, an analyst at Montreal bullion dealer Kitco. "Some of the speculative money has to settle down before we get another run-up in bullion."

After the Comex floor session ended Tuesday, gold prices dropped dramatically, as speculators liquidated positions following a sharp decline in the equities markets. The fallout has continued as investors adjust their holdings amid a possible shift in investors' appetite for risk.

On the economic front, strategists had mixed data to consume. On the favorable side, personal income and spending both increased more than expected during January, according to the Commerce Department. The Institute for Supply Management's index, which reflects the strength of the manufacturing sector, came in higher than the consensus forecast for February.

Painting a somewhat less rosy picture of the economy, the Commerce Department said construction spending fell at twice the rate predicted in January. Also out were Labor Department figures showing higher-than-expected new claims for unemployment insurance last week.