Gold prices slipped on Friday and were headed for their sharpest weekly drop in two and a half months as the U.S. dollar strengthened during the week.
Spot gold was down 0.1% at $1,329.59 U.S. an ounce early Friday morning heading for a fifth session of fall in six. It has shed 1.6% so far this week, its biggest since the week ended Dec. 8, 2017.
U.S. gold futures were down 0.1% at $1,331.20 U.S. per ounce.
The dollar index, which measures the greenback against a basket of currencies, was up 0.21 percent at 89.92, as global investors gingerly dipped their toes back into riskier assets amid rapidly shifting views on the U.S. monetary policy.
It touched a 10-day high of 90.235 on Thursday after hitting a three-year low of 88.253 late last week and was on track for a gain of almost 1% this week.
Experts said spot gold is expected to rise to $1,354 U.S. per ounce as it has stabilized around a support at $1,326.
Financial markets have fluctuated wildly this month as investors fretted about how fast the Federal Reserve might raise rates after official data showed a pickup in U.S. inflation.
Fears of inflation boost gold, which is seen as a safe haven against rising prices. But hikes in interest rates to fight inflation make gold less attractive since it is not interest-yielding.
In other precious metals, silver fell 0.3% to $16.57 U.S. an ounce, palladium fell 0.2% to $1,035.49 U.S. and platinum slipped 0.1% to $986.45 U.S.