Gold prices eased on Thursday as the dollar advanced in choppy trade and on expectations that the US Federal Reserve will further raise interest rates. New orders for US-made capital goods rose more than expected in November. Other data on Thursday showed that third-quarter US economic growth beat expectations, but the number of Americans applying for unemployment aid hit a six-month high last week and US consumer spending increased modestly in November.
Spot gold was down 0.27 pct at $1,128.4 per ounce by 2:53 p.m. EST (1953 GMT), and most-active US gold futures for February delivery settled down $2.5, or 0.22 percent, at $1,130.70 per ounce.
"Despite the current retreat in the dollar, traders have already positioned themselves for a neutral to lower end of the year for gold, with the next support level in the $1,123 area, as the focus remains on the hawkish message of the Fed, which signalled three rate increases in 2017," ActivTrades chief analyst Carlo Alberto de Casa said.
The dollar remained less than 1 percent below the 14-year high hit after the Fed raised US interest rates last week for the first time in a year.
More consistent evidence of US economic strength could prompt the Fed to tighten credit again sooner than later. Higher rates discourage buying of non-interest-paying bullion, which is priced in dollars. US data published on Friday helped strengthen the case for the Fed to raise rates, said George Gero, managing director at RBC Wealth Management.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.43 percent to 824.54 tonnes on Wednesday. Holdings are down over 12 percent since November.
Silver was down 0.94 percent at $15.78 an ounce. Platinum dropped 0.78 percent to $907.80 and palladium fell for the seventh straight session, by 0.57 percent to $653.72 an ounce. The spread between platinum and palladium contracted sharply in recent weeks at $141 an ounce as a result of palladium's strong performance. The autocatalyst metal has risen 16 percent this year, while platinum has gained about 1 percent. The spread is at around $250 per ounce, having averaged $465 over the last 30 years.