Spot gold was 0.3 percent higher at $1,289.70 an ounce by 12:31 p.m. EST (1730 GMT). US gold futures were up 0.3 percent at $1,290.7. "With equities down slightly heading into the weekend, there is some flight to safety in gold," said Bob Haberkorn, senior market strategist at RJO Futures. An index of world stock markets eased on Friday after a five-day winning streak.
"The equities are looking a little heavy up at these levels and yesterday's speech by Fed Chairman Powell felt like Fed might adopt a dovish stance on rates moving forward, which is lending a lot of support to gold," Haberkorn added. Federal Reserve Chairman Jerome Powell said on Thursday the US central bank could be patient on rate policy. Data on Friday showed US consumer prices fell for the first time in nine months in December, which likely supports recent remarks by several policymakers, including Powell, for caution about raising interest rates this year.
Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion. "Recent inflation data from around the globe points to a tamer outlook on rising prices in the coming months," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note. Gold is up about 0.4 percent for the week, mainly supported by a weaker dollar, which slipped to about three-month lows on Thursday against the backdrop of dovish views from the Fed and a de-escalation in the US-China trade dispute.
US officials expect China's top trade negotiator to visit Washington this month after this week's talks with mid-level officials in Beijing. "The $1,300 resistance level for gold is looking very vulnerable. Risk aversion has been supportive, but as we're seeing now, its primary driver is the dollar," said OANDA senior market analyst Craig Erlam. Among other precious metals, palladium was steady at $1,321.99 an ounce, and was up about 1.8 percent for the week. Platinum slipped nearly 1 percent to $811.74.
Silver gained 0.6 percent at $15.65 an ounce.