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NEW YORK (
dropped on Friday as a rise in global markets and improving economic trends put downward pressure on the yellow metal.
Gold for February delivery lost $13.30 to settle at $1,656.60 an ounce at the Comex division of the New York Mercantile Exchange. The
traded as high as $1,671.60 and as low as $1,655 an ounce, while the spot price was losing $9.10, according to Kitco's gold index.
"The economy is improving, but you've also got financial assets rallying," said Adrian Day, president of Adrian Day Asset Management. "People feel less of a need for gold. ... And at the same time, of course, we've had global stock markets rallying now for two, three, four months."
for March delivery dipped 52 cents to $31.21 an ounce, while the
U.S. dollar index
was slipping 0.31% to $79.73.
On Thursday, initial jobless claims dropped by 5,000 in the week ended Jan. 19 to 330,000, which was one of the economic indicators
to sink gold prices that day.
December new-home sales fell to a seasonally adjusted annual rate of 369,000 from an upwardly revised 398,000 in November. The report missed the consensus among economists of 385,000.
The economic mood continued to lighten in Europe on Friday as the European Central Bank announced on Friday that 278 banks in the region said they would repay €137.2 billion earlier than expected.
Gold prices may have been dropping on Friday as option expiration comes on Monday, when traders have to decide whether they'll liquidate their positions.
Due out next week are minutes of the
Federal Reserve's Federal Open Market Committee meeting, a gross domestic product report and the ISM Manufacturing survey. These events could move gold prices decidedly in one direction. Investors may also be hoping for more clarity from the Fed as to FOMC members' positions on how much longer they expect quantitative easing programs to last.
Gold mining stocks were mostly lower on Friday. Shares of
Kinross Gold(KGC - Get Report) were shedding 5.2%, and shares of
Eldorado Gold(EGO - Get Report) were off 5%.
SPDR Gold Trust(GLD) was down 0.50%, while
iShares Gold Trust(IAU) was off 0.61%.
-- Written by Joe Deaux in New York.