Gold futures ended lower on Friday, falling below $950 an ounce as the dollar rose and oil tumbled amid lackluster U. S. consumer confidence data. In addition, consumer price index turned out to be flat which dampened gold's appeal as a hedge against inflation.

Silver futures posted more severe losses than gold on Friday. Silver prices slid sharply following the fall in industrial metals.

A report showed U. S. consumer prices were flat in July and dropped over the past 12 months at the fastest rate since 1950.

That may suggest deflation, not inflation, is more likely despite signs the recession is loosening its grip.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,065.49 tonnes as of Aug. 14, unchanged from the previous business day.

The Reuters/University of Michigan Surveys of Consumers said its preliminary reading of the index of confidence for August fell to 63.2 from 66.0 in July.

Wall Street stocks tumbled more than 1 percent, and oil prices dropped more than $3 to below $68 a barrel. The dollar rose as risk-averse investors sought a safe haven.

Indian festival demand may perk up, and which may also support Gold prices. India’s Gold imports so far has been sluggish but considering the fact marriage season is ahead, retail demand may improve.

Precious metals are expected to remain subdued during the day as the investment demand may remain slack following the absence of inflationary concerns. We do not see any major downside in gold as the dollar may fall against the euro on the back of strong euro trade numbers and thereby cap the downside. Silver is likely to track industrial metals which may correct further from these levels.