Gold prices climbed on Friday as the dollar retreated on expectations the Federal Reserve may pause interest rate hikes if the U.S. economy slows this year, while investors awaited news on progress in the Sino-U.S. trade talks.
Spot gold rose 0.6 percent to $1,293.55 per ounce as at 0604 GMT, heading for a fourth straight weekly gain. The yellow metal is up 0.7 percent so far this week.
U.S. gold futures were up 0.5 percent at $1,293.4 per ounce.
"The weaker dollar and a more dovish Fed are the two most alluring factors for gold," said Stephen Innes, APAC trading head at OANDA.
"There are concerns for the U.S. economy to slow down, perhaps towards the end of 2019 and into 2020, so the markets are pricing rate cuts."
The dollar slipped against other major currencies, having rebounded on Thursday from three-month lows helped by Federal Reserve Chairman Jerome Powell's comment suggesting the central bank is not done tightening monetary policy just yet.
A partial U.S. government shutdown extended into its 20th day and provided little comfort to the U.S. currency, after President Donald Trump threatened on Thursday to use emergency powers to bypass U.S. Congress to pay for a wall on the U.S.-Mexico border.
"The (gold) market is holding back a little as they are concerned the equity market could rally significantly on trade war truce," Innes said.
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