Gold prices changed course to trade higher on Friday supported by a weaker dollar, although expectations of higher-for-longer interest rate hikes in the United Stated by the Federal Reserve capped further upside.
Spot gold rose 0.2% to $1,961.09 per ounce by 0658 GMT. U.S. gold futures edged 0.1% higher to $1,973.40.
"Gold is struggling to move higher because the Fed's message on inflation and interest rates still remains hawkish. So, it's sort of removing the incentive to buy gold because there are more interest rate increases on the horizon," said Edward Meir, a metals analyst at Marex.
While gold is considered a safe haven during economic uncertainties, higher interest rates dull the appeal for zero-yield bullion.
Traders are now pricing in a 72% chance of a 25-basis point rate hike in July after the Fed signalled in new projections that borrowing costs might still need to rise by as much as half a percentage point by year-end.
The dollar index held close to a one-month low, making gold less expensive for overseas buyers.
The dollar came under some pressure after the European Central Bank "turned out to be far more hawkish than expected," and that has helped gold prices, Harshal Barot, senior consultant at Metals Focus said.
Gold could "be little bit volatile" depending on incoming U.S. data and trade in the $1,930 to $1,980 zone in the short term, he added.
The Bank of Japan, meanwhile, maintained its ultra-easy monetary policy despite stronger-than-expected inflation as it focused on supporting a fragile economic recovery amid a sharp slowdown in global growth.
Spot silver rose 0.5% to $23.9799 per ounce, while platinum climbed 0.8% to $993.64 per. However, both metals were headed for a weekly loss.
Palladium fell 0.4% to $1,394.60 but was set for its best week since April.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Sohini Goswami)