Spot gold was mostly unchanged at $1,319 an ounce, at 0715 GMT. Prices touched their lowest since January 4 at $1,306.81 on Thursday.
Spot gold was down 1 percent for the week and headed for its second straight weekly drop due to a recovery in the dollar.
The dollar index, which measures the greenback against a basket of currencies, has risen over 1 percent so far this week, its best since the week ended Oct. 27, 2017. The index rose 0.22 percent at 90.42 on Friday.
U.S. gold futures were down 0.39 percent at $1,313.90 per ounce.
Asian stocks tumbled on Friday after Wall Street shares suffered yet another big slide amid worries over rising bond yields, while perceived havens such as the yen and Swiss franc drew demand amid the turmoil.
“Gold has got some support from safe-haven demand as people are buying to hedge their portfolio against market volatility,” said Helen Lau, analyst at Argonaut Securities.
“The threat of rising interest rates will have some downside pressure on gold … However, in the near-term gold will gain due to volatile markets.”
The Bank of England said on Thursday it was likely to raise interest rates sooner and by more than it thought only three months ago, because Britain’s slow-moving economy is getting a boost from the global recovery.
The benchmark 10-year Treasury note yield rose as high as 2.884 percent on Thursday after the Bank of England signalled more aggressive rate hikes, just below Monday’s
four-year high of 2.885 percent. It last stood at 2.8457 percent.
“The surge in U.S. Treasury yields looks set to continue and this will keep a lid on gold prices due to the likelihood that real rates will be dragged up,” BMI Research said in a note.
“However, we expect a continued rise in inflation expectations to cap real yields, which will limit downside pressure on gold.”
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.07 percent to 826.31 tonnes on Thursday from Wednesday.
Holdings fell over the last three sessions, and have declined 1.7 percent so far this week, the worst since the week ended July 30, 2017.
Among other precious metals, silver inched up 0.1 percent to $16.43 an ounce, after touching its lowest since Dec. 22, 2017 at $16.22 on Thursday.
Platinum rose 0.3 percent to $972.20 an ounce. It hit its lowest since Jan. 10 at $965 in the previous session.
Palladium was mostly unchanged at $962.50. It marked its lowest since Oct. 25, 2017 at $958.95 on Thursday. Source: Reuters