REUTERS - Gold remained volatile in Asian trade on Friday and was set for its first weekly decline in four, with investors continuing to mull over the economic outlook after Republican Donald Trump won this week's U.S. presidential election.
Spot gold was up 0.2 percent at $1,262.20 an ounce at 0458 GMT. The metal fell to an over three-week low at $1,250.70 as well as rising to as much as $1,265.40 earlier in the session. It was set to end the week down over 3 percent.
U.S. gold futures were down 0.4 percent at $1,261.60 per ounce after falling as much as 1.3 percent to a four-week low of $1,250.40 earlier.
The dollar hovered near a 3-1/2-month high versus the yen on Friday, after making big gains overnight as the markets prepared for a Donald Trump presidency that could stimulate the U.S. economy fiscally and lift interest rates.
"The stronger U.S. dollar and a more conciliatory tone from Trump continues to weigh on investor demand," ANZ analysts noted.
The latest U.S. jobs data showed the number of Americans filing for unemployment benefits fell more than expected last week.
The Federal Reserve could raise interest rates more quickly if Washington used lower taxes or higher spending to boost economic growth, Richmond Fed President Jeffrey Lacker said on Thursday.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
The dollar index, which measures the greenback against a basket of major currencies, fell 0.1 percent to 98.672 on Friday.
"Gold is moving according to the dollar. The financial sector seems to have stabilized for a second day on Thursday," Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, said on Friday.
"Some strong physical buying at the lower end is keeping gold from not falling too much. Whenever there is a dip, we have seen strong buying," Leung added.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 1.4 percent to 941.68 tonnes on Thursday from 955.03 tonnes on Wednesday.
Spot gold may bounce moderately to resistance at $1,271 per ounce before falling, as it has found a support at $1,255, according to Reuters technical analyst Wang Tao.
Silver was down 0.2 percent at $18.54 an ounce but was on track for a fourth weekly rise.
Platinum slipped 0.5 percent to $966.98 an ounce. The metal hit a fresh two-week low of $958.50 earlier in the session.
Palladium was up 0.7 percent at $693.20 an ounce. The metal touched a high of $697.90 earlier in the session on Friday, its highest since Oct. 5.
(Reporting by Apeksha Nair in Bengaluru, additional reporting by Nallur Sethuraman; Editing by Richard Pullin, Joseph Radford and Christian Schmollinger)