Gold rebounded from a one-month low on Friday, as lower equities counteracted the impact of a stronger dollar and falling oil markets, but still posted its third straight weekly loss.
U.S. gold futures for delivery in February closed up $2.10 at $1,186.20 an ounce.
Spot gold fell to its lowest since Dec. 1 at $1,168.25 an ounce after the dollar strengthened, but rebounded to $1,194.10, up 0.63 percent at midday on a disappointing ISM manufacturing index report, traders said.
Liquidity was thin in post-holiday trading, with Chinese and Japanese markets closed. Prices were heading for a 0.4 percent weekly decline, the third straight week of losses.
Bullion ended 2014 down nearly 2 percent, following a 28 percent slump the previous year.
Anticipated U.S. interest rate hikes and a recovering economy may strengthen the dollar’s appeal in 2015. Higher rates weigh on non-interest-bearing bullion, while a stronger dollar makes gold more expensive for holders of foreign currencies
“We have an overwhelming consensus that the dollar is going to go higher again and the U.S. Fed is going to start raising rates to normalize monetary conditions at some point over the next six to nine months,” Natixis analyst Nic Brown said. “This means that precious metals will remain under pressure.”
The dollar rose to its highest level in nearly nine years, up 0.7 percent against a basket of six major currencies, mostly on a lower euro, which hit a 4-1/2 year low after the European Central Bank fanned expectations it would take bolder steps on monetary stimulus later this month.
Some demand for the metal returned after a series of disappointing U.S. economic data, which weighed on global shares.
The U.S. manufacturing sector slowed in December to its lowest rate of growth since last January. Separately, U.S. construction spending unexpectedly fell in November.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.25 percent to a fresh six-year low of 709.02 tonnes on Wednesday. Redemptions in 2014 reached 140 tonnes, well below the 460 tonne outflow seen in 2013.
Silver was up 1.10 percent to $15.76 an ounce after posting a 19.3 percent decline in 2014.
Platinum declined 0.63 percent at $1,201.90 an ounce, having fallen 12 percent last year.