Gold prices dipped on Friday, easing back from one-week highs as broadly upbeat U.S. economic data dampened safe haven demand for the precious metal, but prices remained supported as tensions between Russia and Ukraine remained high.

Gold for December delivery dipped 0.17% to $1,288.20 a troy ounce on the Comex division of the New York Mercantile Exchange late Friday. Gold futures rose 0.62% last week, but ended the month down 0.51%.

Gold prices hit $1,297.60 an ounce, their highest level since August 20 on Thursday after Ukraine’s president said Russian troops had entered the conflict in eastern Ukraine to support pro-Russian separatists there.

However, gold retreated from the day’s highs after data showed that U.S. gross domestic product expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction.

Reports on Friday showed that U.S. consumer sentiment rebounded to a seven year high in August, with the final reading of the University of Michigan’s consumer confidence index rising to 82.5 from 81.8 in June.

Another report indicated that manufacturing activity in the Chicago region continued to expand in August, pointing to underlying strength in the sector.

The reports offset separate data showing that U.S. consumer spending unexpectedly fell 0.1% in July.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose to almost one year highs of 82.78 late Friday, as the data pointed to mostly stronger growth. A stronger dollar makes gold more expensive for buyers who use other currencies as the metal is traded in dollars.

The upbeat U.S. data also fuelled concerns that the deepening recovery could prompt the Federal Reserve to raise rates sooner. Higher interest rates would make gold a less attractive investment than interest-bearing assets such as Treasury bonds.

Elsewhere in metals trading, palladium prices rallied to thirteen-and-a-half year highs on Friday, amid concerns that more far reaching sanctions against Russia, the world's largest palladium producer, could hit supplies.

Nymex Palladium for December delivery hit highs of $910.40 a troy ounce, and was last up 0.91%, at $906.30 an ounce.

Meanwhile, silver for September delivery slid 0.61% to $19.49 a troy ounce late Friday. Comex silver edged up 0.16% last week, but ended the month with losses of 4.32%.

Copper for September delivery climbed 0.39% to $3.163 a pound by close of trade. Comex copper futures lost 1.86% for the week, extending the month’s losses to 1.37%.

In the week ahead, the Comex trading floor will be closed on Monday for the Labor Day holiday. Investors will be looking ahead to Tuesday’s Institute of Supply Management report on U.S. manufacturing activity and to Friday’s August nonfarm payrolls report for further indications on the strength of the U.S. economic recovery.

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