Gold fell on Friday for the first time this week as hawkish comments from US Federal Reserve officials renewed bets on a US rate hike this year, but was still on track to end the week with modest gains.
Spot gold was down 0.3 per cent at $1,348.31 per ounce at 0655 GMT, but up 0.1 per cent for the week.
US gold dropped 0.3 per cent to $1,351.10 an ounce.
San Francisco Fed President John Williams on Thursday joined a growing chorus of his colleagues signalling support for a US interest rate hike in coming months. New York Fed President William Dudley reinforced his confidence on a possible interest-rate hike for a second time in the week.
Dallas Fed president Robert Kaplan, however, saw limited room to manoeuvre on rate hikes.
Reports showed the number of Americans filing for unemployment benefits fell more than expected last week, while manufacturing activity in the US Mid-Atlantic region saw a mild improvement this month.
"There is no clear direction from the Fed. Adding to that there are mixed views from the Fed officials," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
Members of the Fed's rate-setting Federal Open Market Committee were generally upbeat about the US economy and labour market, but several said any slowdown in future hiring would augur against a near-term hike.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Signals are neutral for spot gold as it is stuck in a range of $1,337.22-$1,358.01 per ounce, Reuters technical analyst Wang Tao said.
"The money going into the ETFs (exchange-traded funds) looks to be slowing down a bit and it feels that the market has been feeling a bit heavy on the longs," said a Sydney-based precious metals trader.
"Maybe we need a little bit of washout. Won't be surprised if we touch new lows of $1,320."
Holdings of SPDR Gold Trust, the world's largest gold-backed ETF, fell for a second day.
The index of the dollar against a basket of six major currencies was up about 0.2 per cent at 94.359.
A stronger dollar discourages gold buying by making the metal more expensive for holders of other currencies.
European Central Bank rate setters agreed not to discuss any policy change at their July meeting and to keep market hopes for more stimulus in check, minutes showed on Thursday.
Silver was down 0.6 per cent at $19.61 an ounce.
Platinum slipped 0.2 per cent at $1,123.
Palladium was down 0.7 per cent at $707.55, after hitting a one-week high of $717.70 Thursday.