BENGALURU - Gold prices edged higher on Friday as the dollar slipped against major peers ahead of U.S. economic growth data that could shed light on the pace of rate hikes in the world's top economy.
Spot gold was up 0.1 percent at $1,223.96 an ounce as of 0711 GMT. The precious metal was, however, on track for its third straight weekly decline.
U.S. gold futures for August delivery were 0.2 percent lower at $1,223.20 an ounce.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.02 percent at 94.732. Against the yen, the dollar was down 0.2 percent at 110.98.
A weaker dollar makes greenback-denominated gold cheaper for holders of other currencies.
Meanwhile, China's yuan weakened against the greenback, breaching the key 6.8 per dollar level, dragged by a weaker midpoint and fears of further depreciation amid Sino-U.S. trade tensions.
A relatively strong greenback versus the yuan is limiting upside for gold, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"There are concerns about rising U.S. interest rates and the (U.S.-China) trade war, which are also affecting gold for the time being," Leung added.
Meanwhile, a strong reading in second-quarter U.S. economic growth could back the case for faster rate hikes.
Higher U.S. rates tend to boost the dollar and push bond yields up, denting the bullion's non-interest bearing appeal.
"Though we would argue that markets have relatively priced in on greenback vigour and current-term economic data, the precious metal looks poised to erode further as geopolitical uncertainties from the EU and U.S. rescind gently," Benjamin Lu, a commodities analyst at Singapore-based broker Phillip Futures, said in a note.
With trade tensions escalating between Washington and China, the U.S. Senate on Thursday quietly passed a legislation that would lower trade barriers on hundreds of items made in China.
The United States also signalled on Thursday that it is set to push ahead on trade talks with Canada and Mexico after agreeing to suspend hostilities over tariffs with Europe in a fragile deal that may clear the way for renewed pressure on China.
Spot gold is expected to fall into a range of $1,206-$1,214 per ounce, said Reuters technical analyst Wang Tao. [TECH/C]
Among other precious metals, silver rose 0.4 percent at $15.43 an ounce but was headed for its seventh weekly decline.
Palladium gained 0.4 percent to $930.50 an ounce and was up over 4 percent for the week, in what could be its biggest weekly gain since the week of April 20.
Platinum was nearly unchanged at $822.75 an ounce.