NEW YORK/LONDON Gold prices ended lower on Friday as the dollar rebounded against the euro and oil prices fell as much as $7 a barrel, denting the precious metal's appeal as an inflation hedge.
But strong demand for physical gold stocks, such as coins and bars, continued to underpin the market.
Gold was at $827.00/828.60 by New York's last quote at 2:15 p.m. EDT (1815 GMT), down from $832.40/833.40 an ounce late in New York.
"The outlook for the U.S. dollar clearly remains to strengthen against the euro," said Dresdner Kleinwort consultant Peter Fertig. "We expect the European Central Bank will cut rates in the first quarter of next year."
"With oil prices coming down, headline inflation should decline considerably next year and that would be another nail in the coffin of the gold bulls," he added.
Adam Sarhan, founder of TheSarhanAnalysis.com, said that gold must rise above its 50-day and 200-day long-term moving averages on charts to buck its recent bearish trend.
The dollar rebounded against the euro on Friday, dampening gold's early gains. The precious metal is often bought as an alternative investment to the dollar and tends to move in the opposite direction to it.
The greenback fought back from the previous day's losses versus a basket of major currencies on Friday, helped by easing oil prices.
Crude oil prices fell more than $6 on Friday in the biggest one-day percentage slide since 2004 as dealers turned their focus to rising supply levels and weakening global demand.
Gold is rolling back some of the gains it made on Thursday, when it surged to a one-week high of $839.00 as demand for bars and coins soared and dollar weakness fueled interest in commodities as an asset class.
The Reuters/Jeffries CRB .CRB global commodities index posted its biggest weekly gain since 1975.
U.S. gold futures for December delivery GCZ8 settled down $5.50 at $833.50 an ounce on the COMEX division of the New York Mercantile Exchange.
DEMAND SURGES FOR COINS, BARS
Gold is up nearly $50 an ounce from the nine-month low of $773 it reached last Friday, as investors in physical gold stocks returned to the market.
The U.S. mint said in a statement on Thursday that it was temporarily suspending sales of its American Eagle bullion coins due a shortage as demand soared.
European traders also reported that producers were struggling to keep up with demand for some finished products.
Among other precious metals, silver closed lower at $13.33/13.37 an ounce from its Thursday U.S. finish of $13.80/13.87 an ounce.
Spot platinum ended lower at $1,428.50/1,448.50 an ounce from $1,449.50/1,469.50 an ounce late in New York, having hit a one-week high of $1,472.50 earlier on Friday.
Its sister metal palladium inched down to $283.50/291.50 an ounce from its previous finish of $286.00/294.00 an ounce.
Both the platinum group metals are recovering after suffering a major sell-off in the wake of a spate of bad financial reports from carmakers, who consume around half of the world's platinum each year.
"Platinum has had a disastrous July and early August as fears over a collapse in global car sales ... completely overshadowed the few reminders of the metal's precarious supply situation," said Fortis Bank in a monthly report.
(Editing by Jim Marshall)