GOLD futures have rebounded as traders who had bet on lower prices cashed out ahead of the weekend following data showing a decline in US producer prices. Gold for February delivery, the most-actively traded contract, on Friday rose $US9.70, or 0.8 per cent, to settle at $US1,234.60 a troy ounce on the Comex division of the New York Mercantile Exchange. During the week, the contract gained 0.4 per cent. Gold prices swung in a range of about $US40 as traders tried to gauge how mixed US economic data and a congressional budget deal would affect the Federal Reserve's decision on whether to curb its stimulus. Gold had retreated on Thursday as investors viewed this week's US budget deal as the latest evidence weighing in favour of a reduction in the Fed's bond purchases. Such stimulus efforts have drawn investors looking for an inflation hedge to gold in recent years. The belief that the US economy was in recovery mode and the Fed would throttle back has helped drive gold prices 26 per cent lower in 2013. With the Fed meeting set for next week, some traders didn't want to hold positions going into the weekend, said George Gero, vice president with RBC Capital Markets. Gold extended its earlier gains on Friday after data showed an index of US producer prices fell 0.1 per cent in November. The data could worry Fed policymakers that inflation is running well below their targets, Gero said. The report "may forestall some of the terror" within the gold market of an imminent Fed shift. The central bank has set a target of two per cent inflation. Still, some market watchers expect gold's woes to continue regardless of the timing of a decision by the Fed. "There's more positive (economic data) coming out of pretty much everywhere," said Graham Leighton, a precious metals broker with brokerage Marex Spectron. Some traders, Leighton said, had already started closing out positions in gold in preparation for the end of the year. Unless there's a surprising move by the Fed, he said, "from now until the end of the year I think we're just going to see some fairly volatile moves without any clear direction." London PM Gold Fix: $1,232.00; Previous PM $1,225.25 Feb gold $1,234.60, up $9.70; Range $1,219.59-$1,238.10 Mar silver $19.604, up 15.1 cents; Range $19.280-$19.740 Jan platinum $1,362.90, down $1.50; Range $1,356.30-$1,370.30 Mar palladium $715.75, down $4.05; Range $715.05-$725.75