Gold inched up on Friday as optimism over U.S.-China trade talks pressured the dollar, but signs that the U.S. Federal Reserve could raise interest rates again this year kept prices below a 10-month high hit earlier this week.
Spot gold rose 0.3% to $1,326.56 U.S. per ounce early Friday The metal was headed for a second straight weekly rise, up almost 0.4% this week.
U.S. gold futures were up 0.1% at $1,329.10 per ounce.
The dollar index against a basket of six major currencies was set to decline about 0.3%this week, which could be its biggest weekly fall in a month. The U.S. unit has been under pressure on hopes of a U.S.-China trade deal.
U.S. and Chinese negotiators resumed high-level talks on Thursday to hash out a deal that could end their trade war, just over a week before a U.S.-imposed deadline.
The shiny yellow metal had hit a 10-month high of $1,346.73 U.S. on Wednesday, but minutes from the Fed's January policy meeting indicated there might in fact be a rate hike this year, erasing gains in gold.
Elsewhere, palladium gained nearly 1%to $1,480.96 U.S. per ounce, having surpassed the key $1,500 level for the first time on Feb. 20.
The autocatalyst metal was on track for a third straight week of gains, up nearly 3%
Platinum rose 0.4% to $822.50 U.S., and was set for its best week since early January. Silver was up 0.6% to $15.90. It was poised to snap a slump of two consecutive weekly losses.
