Gold inched lower on Friday, having posted its biggest daily decline in two weeks in the previous session, as the impact of a weak dollar was offset by gains on Wall Street.
The metal had broken below the key psychological level of $1,300 on Thursday to hit a one-week low due to sharp gains in the dollar.
"The dollar strength really hurt precious metals and we're seeing some of that reverse with most currencies running a little higher versus the dollar," said Chris Gaffney, president of world markets at TIAA Bank.
"We've got tame inflation, the trade situation is getting resolved and Brexit looks like it's going to be pushed down the road. So right now investors don't have any incentive to buy gold," Gaffney added.
U.S. stocks climbed back to near record highs on Friday after the largest U.S. bank, JPMorgan Chase & Co, soothed worries that the first-quarter earnings season would pour cold water on Wall Street's big rally back from last year's slump. [.N]
Spot gold edged 0.1 percent lower to $1,290.71 per ounce as of 3:30 p.m. EDT (1930 GMT).
U.S. gold futures settled 0.1 percent higher at $1,295.2 an ounce.
Meanwhile, the dollar index was down 0.2 percent against a basket of leading currencies and was headed for its first weekly decline in four weeks, keeping gold from falling further. [USD/]
A further dovish tone from the U.S. Federal Reserve and weaker global growth data could propel gold higher, Gaffney said, but that for now, it was going to struggle to get back above the $1,300 level.
Early in the week, bullion received support from increased buying by central banks and a dovish view from the European Central Bank as well as minutes from the U.S. Fed. However strong U.S. economic data on Thursday boosted the dollar and triggered a sell-off in gold.
Data showed weekly U.S. jobless claims fell to the lowest in nearly half a century and producer prices increased the most in five months in March.
"Given the marked decline we expect in U.S. equities this year, we suspect that safe-haven assets will soon surge," Capital Economics analysts said in a note.
"We think gold investment should be strong, particularly in the form of exchange-traded fund buying. As a result, we expect the price of gold to rally to $1,400 per ounce by end-2019."
Silver was down 0.1 percent at $14.94 an ounce, but was on track for its third weekly decline. Spot platinum rose 0.1 percent to $888.11 per ounce, but was on track to snap four straight weeks of gains. Palladium climbed 0.6 percent to $1,373.02 per ounce and was up 0.3 percent for the week.