Gold gained on Friday as the dollar and bond yields eased but remained on course for a third straight weekly dip as strong US economic data reinforced bets that the Federal Reserve will keep interest rates elevated reports Reuters.
Spot gold was up 0.2 per cent at $1,893.10 per ounce by 1208 GMT, after touching its lowest in five months on Thursday. US gold futures rose 0.4 per cent to $1,923.00.
The dollar was down 0.1 per cent, making gold cheaper for holders of other currencies.
"Ultimately, the medium-term outlook for gold is set to be influenced by Powell's highly anticipated speech at Jackson Hole. In the meantime, $1,900 remains a key level of interest," said Lukman Otunuga, senior research analyst at FXTM.
"Sustained weakness below the $1,900 level may open a path toward $1,870."
Traders expect the Fed to hold rates in the 5.25 per cent-5.5 per cent range until 2024, according to CME's Fedwatch tool.
"If the market interprets what is said there as making another rate hike more likely in the U.S., the gold price could fall somewhat further still," said analysts at Commerzbank in a note.
"In general, we are convinced that U.S. interest rates have already peaked."
Benchmark 10-year U.S. Treasury yields eased from their highest levels since October, propping up zero-yielding bullion.
On Thursday, holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, registered the biggest drop since July last year.
However, the Swiss bank forecast central bank gold-buying would remain strong for the rest of the year.
Spot silver rose 0.4 per cent to $22.78 per ounce. Platinum gained 1.3 per cent to $901.31 while palladium was up 0.1 per cent at $1,218.58, though both were set for weekly declines.
