US gold futures back-pedalled on Friday in holiday-shortened trade, hit by rising equities and the dollar as traders focused on the prospect of accelerating US interest rate rises, dealers said. New York gold futures wrapped up trading early at about noon EST (1700 GMT). The market will be closed on Monday in observance of Martin Luther King Jr. Day.
Gold for February delivery fell $2.10 to end at $423 an ounce on the New York Mercantile Exchange's COMEX division, hardly changed from the morning, after trading between $426.10 and $420.70.
"Gold is a little lower on dollar strength," Frank Aburto at F.C. Stone said.
Dollar strength tends to weigh on gold as it makes the metal costlier for non-US investors, while higher equities can deter some investors from seeking out safe haven assets, such as gold.
Higher US rates tend to lift the dollar as well.
The greenback at first rallied after a senior Federal Reserve official hinted the United States could accelerate the pace of raising interest rates and Washington pledged for a tighter budget and strong dollar policy.
Then, after morning data showed US headline producer prices fell a more-than-expected fell 0.7 percent in December, the buck extended gains against the euro.
Industrial output rose 0.8 percent, above forecasts for a rise of 0.4 percent. The euro was around $1.3095 at midday, off from $1.3105 earlier, and off from levels late Thursday.
The Dow Jones industrial average was up 49.36 points, or 0.47 percent, at 10,555, at early afternoon.
Spot gold was barely changed from the morning at $422.70/3.20, off from Thursday's New York closing level at $424.35/5.10. Friday's afternoon fix in London was at $422.50.
"Scaled-down support should be found from $425 to $418 but I think we will soon test back into the $432-45 price band before heading back toward $455-458," TheBullionDesk.com said in a report.
Some analysts have forecast this week that gold should average around $450 in the next several months, on a stronger euro, improved fabrication demand and speculative buying.
COMEX March silver lost 15 cents to end at $6.595 an ounce, trading $6.775 to $6.58. Spot silver was worth $6.57/60 versus $6.71/74 previously. It fixed at $6.63.
NYMEX April platinum fell $6.20 to $855.20 an ounce. Spot platinum was at $854/857.
March palladium slipped $4.85 to $184.15 an ounce. Spot hit $182/187.
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