After edging higher early on in the session, as the dollar weakened on data that showed U.S. consumer price index rose an annual 2.7% in August, gold prices retreated to end on a negative note on Friday.
The 2.7% increase of consumer price inflation was below the 2.8% forecast and off the 2.8% rise in the previous period.
The dollar's retreat was also due to the Turkish central bank's decision on Thursday to hike its interest rates sharply to rein in inflation and prevent a currency crisis.
Although the inflation report and data showing a less than expected increase in retail sales growth in August raised expectations the Federal Reserve might not hike rates in December, encouraging industrial production and consumer sentiment reports subsequently pulled the dollar out from lower levels, which in turn resulted in the yellow metal drifting down into negative territory.
The dollar index, which had eased to 94.35, recovered and moved towards 95.00 subsequently.
Gold futures for December ended down $7.10, or 0.6%, at $1,201.10 an ounce. For the week, gold futures gained $0.70.
Silver futures for December settled at $14.142 an ounce, down $0.102 from previous close.
Copper futures for December ended down $0.370, at $2.460 per pound.
The U.S. Commerce Department said retail sales inched up by 0.1% in August after climbing by an upwardly revised 0.7% in July. Economists had expected retail sales to rise by 0.4% compared to the 0.5% increase originally reported for the previous month.
A report released by the Federal Reserve on Friday showed U.S. industrial production rose by slightly more than expected 0.4% in August, matching the upwardly revised increase in July. Economists had expected production to rise by 0.3% compared to the 0.1% uptick originally reported for the previous month.
The bigger than expected increase in production was partly due to a jump in utilities output, which surged up by 1.2% in August after inching up by 0.1% in July. Higher mining output also contributed to the increase in industrial production. Manufacturing output edged up by 0.2% in August after rising by 0.3% in July.
Meanwhile, consumer sentiment in the U.S. has improved by much more than anticipated in the month of September, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.
The bigger than expected increase by the headline index came as the current economic conditions index surged up to 116.1 in September from 110.3 in August.
The index of consumer expectations also rose to 91.1 in September from 87.1 in August, reaching its highest level since July of 2004.
Meanwhile, amid reports about a fresh round of trade talks between U.S. and China in the near future, there are reports that Donald Trump has instructed his aides to impose tariffs on $200 billion worth of Chinese products, adding to the already $50 billion in place. This follows his threat last week to impose another $267 billion on China's exports to the US.