US gold futures settled down 0.4 percent at $1,287.4 per ounce. "Gold today is being driven by a higher dollar and the two generally trade inversely, but overall it's not changing the technical stance on the asset," said Michael Matousek, head trader at US Global Investors. Matousek said investors are watching to see if gold breaches the $1,300 or the $1,275 level.
"Gold has seen some consolidation beneath the psychological $1,300 level, with a pull on each side of the market," said David Meger, director of metals trading at High Ridge Futures. "There is some support from the Fed less likely to raise interest rates and yet on the other side a little lesser need for safe haven as we've seen a rebound in equities as of late."
Fed Chairman Jerome Powell said on Thursday the US central bank has the ability to be patient on monetary policy given data showing stable prices, and downplayed suggestions that interest rates would be raised twice more this year. Global markets have been on the rise for the previous four sessions, but lost steam on Thursday on limited clarity from US-China trade talks and as data from China and France fed worries about the global economy. In other metals, palladium dipped 1.02 percent to $1,312.99 per ounce, a session after scaling an all-time high of $1,342.43.
"There is always a potential for some profit-taking in palladium," said Capital Economics analyst Ross Strachan. Silver fell nearly 1 percent to $15.60 per ounce, while platinum was down 0.6 percent at $820.20.