MADRID (MarketWatch) — As the dollar looked set to keep roaring higher, gold prices crept backwards on Friday, setting up what could be a battle to hold onto the key $1,200-an-ounce level. Gold for April delivery GCJ5, -0.12% fell $4.20, or 0.3%, to $1,206 an ounce in electronic trading. That’s after Thursday’s gain of $8.60 to $1,210.10 an ounce — the highest settlement for a most-active contract since Feb. 18. Taking a bit out of gold’s rally was strength in the dollar, which while abating somewhat on Friday, still nabbed a major high on Thursday. The U.S. Dollar Index DXY, -0.25% soared to its highest level since 2003, rising more than 1.1% to 95.150, according to FactSet data. The index was just below that, at 95.01, on Friday. Gains for the dollar came after a jump in U.S. durable-goods orders and higher U.S. consumer prices, which could make the case for a sooner-rather-than-later rate hike in the U.S. from the Federal Reserve. Dollar strength puts pressure on dollar-denominated prices for gold. As well, there were comments from various Fed members, such as John Williams. The president of the San Francisco Fed said the central bank can’t wait until inflation is back above 2% before starting to hike short-term interest rates, speaking in an interview on Fox Business Network. Also see: Fed’s Mester wants rate hike to be ‘viable option’ by June meeting Other metals were also weaker. April platinum PLJ5, +0.20% fell 60 cents, or 0.1%, to $1,173 an ounce, while June palladium PAM5, -0.44% the most-active contract, slipped $4.05, or 0.5%, to $806.45 an ounce. May copper HGK5, -0.84% fell 3 cents, or 1%, to $2.678 a pound.

Source