) --

Gold prices

were slightly lower Friday after U.S. economic data showed signs of improvement.

Gold for February delivery was down $3.80 at $1,606.80 an ounce at the Comex division of the New York Mercantile Exchange. The

gold price

traded as high as $1,615.60 and as low as $1,606.00 an ounce while the spot price was up ten cents, according to Kitco's gold index.

Silver prices

were up 27 cents at $29.30 an ounce while the

U.S. dollar index

was slightly down at $79.94.

Spot gold prices were relatively flat on favorable U.S. economic data, which reduced investors' demand for the U.S. dollar as a refuge.

Vote: Where will gold prices finish in 2011?

Durable goods orders surged in November by 3.8%, better than the 2% expected.

Thursday's report on initial jobless claims for the week ended Dec. 17 dropped by 4,000 to a better than expected 364,000. Economists had forecast a rise to 375,000. The reading from the prior week was upwardly revised from 366,000 to 388,250.

U.S. consumer sentiment also showed improvement this month. An index on consumer sentiment from the University of Michigan came in at 69.9 in December, after a revised 64.1 in the prior month. Economists had expected the reading to edge up to 68 after an original reading 67.7 for November.

The Conference Board's index of leading indicators, another gauge of the state of the economy, rose 0.5% in November, better than the 0.3% expected and adding to the 0.9% increase in the prior month.

"Evenly divided market at this $1600-$1650 expected range with buy stops probably over $1615 closes as we head for the last week of trading," George Gero, financial consultant at RBC Wealth Management, says.

The European Central Bank's recent easing of credit and cheap liquidity could support gold prices, HSBC says in a note.

Stephen King, HSBC's chief economist, says that the near-term implications to prevent liquidity shortages in European banks may support the Euro, which in turn would likely buoy gold prices.

Precious metals might be confined to narrow ranges on Friday, due in part to early closes and the Christmas position, says James Moore, a research analyst at Fast Markets.

"Gold is likely to carry out further base building above the $1600 mark but the metal is struggling to reclaim the 200-day moving average by gold ($1626) which leaves it vulnerable to further technical pressure in the run up to year-end," Moore says.

Gold mining stocks

were choppy Wednesday.

Kinross Gold

(KGC) - Get Report

was unchanged at $11.83 while

Yamana Gold

(AUY) - Get Report

was rising 0.84%% at $14.99.

Other gold stocks,


(AEM) - Get Report

was trading lower at $36.77 and

Eldorado Gold

(EGO) - Get Report

was up at $14.14.

Image placeholder title


Written by Joe Deaux in

New York.

Related Articles:

How to Invest in Gold

Do Gold Prices Have Room to Rise?