Gold futures fell hard Friday, tracking other assets after a drop in consumer sentiment battered stocks and a report showing benign inflation for June offset gold buying on inflation fears.

Gold for August delivery lost $20.10, or 1.7%, to $1,188.20 an ounce on the Comex division of the New York Mercantile Exchange. It was gold's largest one-day drop since July 1, and the lowest settlement price since May 21.

"We are seeing a positive correlation between gold and equities," said Adam Klopfenstein, senior market strategist at Lind-Waldock.