Gold futures turn modestly lower as a stronger dollar reduces the investment appeal of the metal, which nonetheless stays on track to end with a third straight week of gains.

NEW YORK (MarketWatch) -- Gold futures fell Thursday, pulling back from their record highs above $1,150 an ounce, as souring sentiment over U.S. economic prospects lifted the U.S. dollar, reducing gold's appeal as a hedge against a weaker currency.

The hedge-fund firm that made billions of dollars betting against subprime-mortgage securities, is starting a gold fund, tapping into investor concern about a weak U.S. dollar and inflation.

Gold futures retreated from their record highs Tuesday, as the U.S. dollar rebounded after data showed a big decline in a key U.S. price index.

Gold futures fall Tuesday, with the most active contract slumping below $1,135 an ounce, as the U.S. dollar bounces back slightly.

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