Spot gold was flat at $1,338.07 an ounce by 0636 GMT.
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Gold futures headed for the biggest gain in eight sessions after government data showed USA retail sales stalled in July, prompting traders to reduce bets that the Federal Reserve will raise rates by the end of the year.
The US Dollar Index, a measure of the dollar against a basket of major currencies, also fell 0.26 percent to 95.66 as of 17:00 GMT. The metal, however, was on track for a weekly gain. US gold futures for December delivery were down 60 cents at $1,351.30 an ounce.
Gold futures edged higher on Friday morning in the USA following yet another round of poor American consumer data, although risk-on sentiment is capping potential upside.
Yesterday, Dow Jones, S&P 500 and Nasdaq all closed at record levels, fueled by better-than-expected United States labour market data and calmer market conditions. “There is a big mix of data with some being supportive and some being not”, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Investors expect the Fed, supported by positive economic data, to lift rates again in December, but other countries are increasingly looking to raise stimulus. The firm dollar was supported by comments from San Francisco Fed president John Williams that suggested a United States interest rate increase this year was still a real possibility as inflation pressures grew.
Holdings in gold-backed exchange-traded funds added 0.94 metric ton to 2 039.9 tons on Thursday, data compiled by Bloomberg show.
Physical demand remains robust with 1,290 tonnes bought over the first quarter, a 21-percent increase year-on-year, making it the second-best quarter on record, according to the World Gold Council. There could be a knee-jerk reaction on a rate hike.
“The U.S. economy doesn’t feel very strong”, said Peter Hug, global trading director at Kitco Metals. Palladium rose 0.4 percent to $688.45 and was set to finish the week with a modest loss. Platinum was also up 2.4% at $1,177.80, after rising to $1182.20 per ounce, the highest since April 2015. “A further move lower in the platinum group metals could trigger a move below $1,330 for gold in the next few days”, trader MKS Pamp said in a note.
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As for other precious metals, Comex silver for September delivery edged down 13 cents or 0.7 percent to $19.890 per ounce.
