Spot gold rose 0.1% to $1 223.91 an ounce by 03:42 GMT, on track for a gain of 0.7% for the week.
Gold rose 0.5% on Thursday, rebounding from a nine-month low of $1 206.85 touched earlier in the session, as a sharp sell-off in US equities prompted investors to buy bullion as a safe haven.
Traders said gold may still fall below $1 200 - a key psychological level - which could trigger further selling.
"The stronger dollar has dampened interest for gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, adding that the gains in gold prices could be short-term.
Asian shares were poised to end the week on a sour note on Friday after a steep drop on Wall Street, while the dollar steadied close to four-year highs touched in the previous session.
"Physical demand could help gold hold above $1 200 but demand is not strong enough to provide support," Leung said.
Though physical buying in Asia - the top gold consuming region - has increased in recent days as prices slid towards January's lows, it has not picked up robustly as many expect further price drops.
Data on Thursday showed that China's net gold imports from main conduit Hong Kong tumbled in August to the lowest since May 2011 due to weak demand in the world's biggest bullion consumer.
India will soon see a demand boost with the beginning of the wedding and festival season. China could also see an uptick as it goes on a week-long holiday from October 1.
The bigger impact on prices could still come from economic data. Markets are eyeing more US data to gauge the strength of the economy and its impact on Federal Reserve policy.
Strong data could prompt the Fed to increase interest rates faster and sooner than expected, which could hurt non-interest-bearing bullion, and boost the dollar further.