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Singapore - Gold traded near a three-month high on Friday and was on track for its biggest weekly gain in four months on receding expectations the Federal Reserve would hike US interest rates soon.
Spot gold was steady at $1 220.70 an ounce by 09:10, after rising 0.5% on Thursday. Prices had climbed to $1 227.04 in the previous session, their highest since February 17.
The metal is up nearly 3% this week, the biggest weekly gain since mid-January.
"Gold's break over the technical 200-day moving average of $1 218 triggered further buying from momentum investors," said HSBC analyst James Steel.
A convincing close above $1 228 will be technically bullish for bullion and may prompt further gains, he said, adding that bullion will continue to be sensitive to US economic data.
Recent US data has supported market expectations that the economy is not strong enough for the Fed to start rising record-low rates from June.
The bullion market was getting comfort from Wednesday data that showed US retail sales were flat in April, weaker than expected.
That added to second-quarter growth concerns already prompted by sluggish US nonfarm payrolls data last week.
Data on Thursday that showed the number of Americans filing new claims for unemployment benefits falling last week towards a 15-year low failed to alleviate concerns over the economy.
The dollar was trading close to four-month lows on Friday against a basket of major currencies, on speculation the US central bank will not hike rates until later this year.
READ: Dollar ticks up in Asia after days of losses
Higher rates would boost demand for the greenback, but diminish the appeal of non-interest-paying bullion.
US data due on Friday, including April industrial production and the University of Michigan's preliminary May reading on consumer sentiment, should provide more cues.
Investors, however, seemed uncertain about bullion's rally and how long it would last.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.61% to 723.91 tonnes on Thursday, a four-month low.
Strength in equities could be keeping some investors away. The possibility of a delayed rate hike helped push the S&P 500 to a record high close on Thursday.
Physical buying slowed in Asia as higher prices kept some consumers away. In China, premiums eased about 50 cents to $1 an ounce over the global benchmark on Friday, from premiums of $2 to $3 earlier in the week.
Among other precious metals, silver was headed for its biggest weekly gain in two months. Platinum was on track for a third straight weekly gain, but palladium was set for a weekly decline.
