Gold prices dropped sharply in early trading Friday as a stronger dollar limited the metal's hedge appeal. The decline erased the gains seen in the previous two sessions.

April gold dropped to $924.30, down $17.90 for the day. Prices touched as low as $921.00 earlier in the day.

The dollar spiked higher versus the euro and sterling Friday morning in New York as demand from riskier currencies waned. After suffering steep losses last week, the dollar has rebounded away from a 10-week low against the euro and also gained on the pound.

On the economic front, the Commerce Department reported personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, data showed personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

Gold gained Thursday for the second straight day as some more dismal economic data increased the precious metal's hedge value. The metal had dropped in six of the previous seven sessions.

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