On the Comex division of the New York Mercantile Exchange, gold futures for December delivery settled at USD1,755.25 a troy ounce by close of trade on Friday, losing 0.9% on the day.
Earlier in the session prices touched a daily low of USD1,753.75 a troy ounce, the weakest level since September 26. On the week, gold futures declined 1.5%, the biggest weekly drop since the last week of June.
Gold futures were likely to find support at USD1,739.35 a troy ounce, the low from September 26 and resistance at USD1,781.55, the high from October 8.
Market players remained cautious amid ongoing uncertainty over Spain’s position on requesting external financial aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating by two notches to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
Gold prices came under additional pressure following the release of upbeat U.S. economic data, which raised concern the Federal Reserve might scale back its monetary easing measures.
Official data Friday showed that U.S. consumer sentiment rose to its highest level in five years in October. The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
The data came one day after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000 in the previous week, compared to expectations for an increase of 1,000.
It was the lowest reading since February 2008, reinforcing the view that the U.S. labor market is improving, following last week’s stronger-than-expected non-farm payrolls report.
The Federal Reserve announced last month that it will buy USD40 billion of mortgage-backed securities each month until the U.S. labor market improves.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Elsewhere on the Comex, silver for December delivery settled at USD33.48 a troy ounce by close of trade on Friday. Earlier in the session, silver futures touched a low of USD33.46, the weakest level since September 26.
On the week, silver futures lost 3.05%.
Meanwhile, copper for December delivery shed 1.6% over the week to settle at USD3.696 a pound by close of trade Friday.
Growing fears over the health of the global economy have dampened the appeal of the industrial metal in recent sessions.
Copper traders were looking ahead to Chinese third quarter growth figures due out on October 18, to gauge whether the world second largest economy is heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
For the latest updates on the stock market, PRESS CTR + D or visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today