Gold prices pared their early gains Friday as robust economic news boosted the dollar.

Contracts for June delivery of bullion were up 40 cents at $668 an ounce in New York. The bullion-holding exchange-traded funds,

streetTracks Gold Shares

(GLD) - Get Report


iShares Comex Gold Trust

(IAU) - Get Report

, were down a hair.

A host of firm economic news was providing support for the greenback, which tends to move in the opposite direction of gold. The Chicago purchasing managers' index, a report tracking the Midwest's manufacturing economy, jumped much more than anticipated for March, following a poor showing in February.

"The Chicago PMI for March was off the charts stronger than expected, showing a rebound in the Midwest economy possibly due to strength in aircraft orders," says Randy Diamond, an analyst at Miller Tabak in New York, in a research brief.

Also published were data from the Manhattan-based Economic Cycle Research Institute, whose weekly leading index showed another uptick. Also out were Commerce Department figures showing fair growth in personal income and spending.

Collectively, the statistics signal strength for the dollar and therefore a headwind for any rally in gold.

One dollar was recently buying 118.36 yen, up from 117.98 yen late Thursday. The euro was trading for $1.3294, down from $1.3337 previously.

"Given the gains in oil and increased tensions between Iran and the West, I think the majority of players will be reluctant to go into the weekend short," writes James Moore, an analyst at

in London.

In the precious metals patch, HSBC Securities upped its rating on shares of

Meridian Gold

( MDG) and

Harmony Gold

(HMY) - Get Report

, both to overweight from neutral.

Meridian also got a nod from BMO Capital Markets, which lifted its rating on the shares to outperform from market perform. Harmony shares were moving up 1.9%, while those of Meridian were ahead 2.5% in recent action.

As for base metals, copper was tacking on 6 cents at $3.14 a pound on further declines in inventories and aided by the strong manufacturing data.

Turning to ferrous metals, UBS boosted its ratings on

Steel Dynamics

(STLD) - Get Report


U.S. Steel

(X) - Get Report

, the former to buy from neutral, and the latter to neutral from reduce.

Shares of U.S. Steel were off 1.2%, while Steel Dynamics was up 2.8%.