Gold futures declined on Friday, but the precious metal managed to recoup most of the day’s losses amid an escalation of the conflict in eastern Ukraine.

On the Comex division of the New York Mercantile Exchange, gold for December delivery slumped 0.72%, or $9.50, to settle at $1,306.20 a troy ounce by close of trade on Friday. Prices dropped to $1,293.00 an ounce earlier in the day, the lowest since August 6.

Futures were likely to find support at $1,288.50, the low from August 6 and resistance at $1,321.80, the high from August 14. On the week, Comex gold prices inched down 0.36%, or $4.80.

Gold rallied off the lowest levels of the session after Ukraine said its forces had attacked and partly destroyed a Russian armored convoy that entered Ukrainian territory overnight.

Separately, NATO’s secretary-general said the organization observed a Russian “incursion” into Ukraine on Thursday night, which was denied by Moscow.

The precious metal is often seen as a haven investment in times of geopolitical uncertainty.

Gold prices sold off sharply earlier in the session as strong U.S. economic data underlined the view that the recovery is gaining momentum.

The Federal Reserve said U.S. industrial production rose 0.4% in July, beating expectations for a 0.3% gain.

A separate report showed that U.S. producer price inflation rose 0.1% on year last month, in line with expectations. Core producer price inflation, which excludes food, energy and trade, rose 0.2% in July, also in line with market projections.

Also Friday, the New York Federal Reserve said that its Empire State manufacturing index fell to a four-month low of 14.69 this month, from a reading of 25.60 in July, worse than expectations for a decline to 20.0.

Meanwhile, the preliminary Thomson Reuters/University of Michigan consumer sentiment index ticked down to a nine-month low of 79.2 in August from 81.8 in July. Analysts had expected the index to rise to 82.5 this month.

In the week ahead, investors will be anticipating an annual meeting of top central bank officials and economists in Jackson Hole, Wyoming from August 21 to 23.

The spotlight will be on Fed Chair Janet Yellen, who will speak on Friday in her first appearance at Jackson Hole as head of the U.S. central bank.

Gold traders will also pay close attention to the minutes of the Fed’s July policy meeting due to be published on Wednesday for further clues about the timing of future interest rate hikes.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending August 12.

Net longs totaled 133,708 contracts, up 22.1% from net longs of 104,111 in the preceding week.

Also on the Comex, silver for September delivery plunged 1.91%, or 38.1 cents, on Friday to settle the week at $19.52 a troy ounce, the lowest since June 17.

On the week, the September silver futures contract lost 2.1%, or 42.0 cents, the fifth consecutive weekly decline.

Data from the CFTC showed that net silver longs totaled 23,506 contracts as of last week, compared to net longs of 29,065 contracts in the preceding week.

Elsewhere in metals trading, copper for September delivery tacked on 0.39%, or 1.2 cents, on Friday to end the week at $3.173 a pound by close of trade.

Despite Friday’s modest gains, Comex copper prices fell 2.2%, or 7.0 cents, on the week, amid indications of a slowdown in demand from China, the world’s largest consumer of the industrial metal.

Prices of the industrial metal hit $3.082 a pound on Thursday, the lowest since June 20, after data showed that Chinese industrial production rose at an annualized rate of 9% in July, slowing from an increase of 9.2% a month earlier.

Fixed asset investment, which tracks construction activity, increased 17.0% in the January-July period, below expectations for a gain of 17.4%.

Chinese bank lending and money supply growth for July also came in below expectations, underlining concerns about slowing growth in the world's biggest consumer of the industrial metal.

New loans dropped to 385.2 billion yuan last month from 1.08 trillion yuan in June, while social financing aggregate, a broad measure of liquidity in the economy, fell to 273.1 billion yuan, the lowest monthly reading since October 2008.

According to the CFTC, net copper longs totaled 19,096 contracts as of last week, down from net longs of 34,330 contracts in the preceding week.

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