Gold hovers near 10-week high, lower Friday

Gold prices fell on Friday as Asian shares firmed, but the metal held near a more than 10-week high hit in the previous session when it breached a key resistance level, stoking optimism about a potential uptick in prices.

Asian stocks staged a rebound on Friday to set course for their first gains in two weeks, soothing investor sentiment, which was hit after a major volatility index, seen as Wall Street's fear gauge, rose to an eight-month high.

Spot gold was down 0.4% at $1,218.86 U.S. an ounce, after jumping about 2.5% on Thursday, its sharpest gain since June 2016, as a rout in equities sent investors rushing to safe-havens.

U.S. gold futures were down 0.4% at $1,222.30 U.S. an ounce.

Thursday's surge ensured that bullion broke above a narrow trading range it has been stuck in for the past month and a half.

Gold has fallen more than 10% from a peak in April, with investors increasingly switching to the safety of the greenback as the U.S.-China trade war unfolds against a backdrop of rising U.S. interest rates.

But prices have recovered from a 1-1/2-year low of $1,059.96 U.S. hit in mid-August, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices.

Spot gold has gained about 1.4% on the week this week, on track for its best weekly performance in seven.

Meanwhile, palladium was up 0.9% at $1,086.75 U.S., after hitting its highest since Jan. 26 at $1,096.80 in the previous session.

Silver was little changed at $14.56 U.S., while platinum was down 0.3% at $836.50.