Gold prices slipped on Friday from a one-month high hit in the previous session as investors booked profits and the dollar strengthened, while worries over U.S.-China trade dispute capped losses.
Spot gold fell 0.3% to $1,298.25 U.S. per ounce early Friday morning, after reaching its highest since May 15 at $1,309.30 an ounce on Thursday.
U.S. gold futures for August delivery were down 0.5% at $1,301.50 U.S. per ounce.
The dollar index, which measures the greenback against a basket of six major currencies, rose 0.3% to 95.079. It hit its highest in over seven months earlier in the session.
Investors are keeping a close tab on trade tensions between the world's top two economies and if the United States imposes tariffs on Chinese goods, gold could test the overnight highs of $1,309-$1,310 U.S. an ounce.
U.S. President Trump has made up his mind to impose "pretty significant" tariffs on Chinese goods, an administration official said on Thursday, as Beijing warned that it was ready to respond if Washington chose to ratchet up trade tensions.
With the looming U.S.-China trade deadline, investors continue to view gold as an excellent hedge against a possible equity market tumult if trade war escalates beyond the status quo.
Meanwhile, the Bank of Japan maintained its ultra-loose monetary policy and downgraded its view on inflation.
In other precious metals, silver fell 0.1% to $17.12 U.S. an ounce, a day after it hit its highest since April 19 at $17.32 an ounce. The metal has risen about 2.2% this week.
Platinum was 0.3% higher at $902.30 U.S. an ounce.
Palladium was down 0.3% at $1,004.72 U.S. and was on course for its first weekly decline in four.
