Gold pulled back from an earlier five-month high on Thursday as the dollar clawed back some of the ground it lost after U.S. President Donald Trump said the U.S. currency was too strong.
The metal stayed on track for its best week since June, however, as concerns over tensions in North Korea and the Middle East kept stock markets under pressure.
Spot gold showed a 0.02 percent gain at $1,286.42 an ounce, while U.S. gold futures for June delivery were up $10.40 to settle at $1,288.50.
"Since risk aversion is now in place and equity markets are on the retreat, gold prices are supported, but should this trend reverse, I wouldn't be surprised to see gold coming under some pressure," Commerzbank analyst Eugen Weinberg said.
Trading volumes in wider markets have been light ahead of Easter, with most financial markets closed from the Good Friday holiday.
While the dollar pulled back some ground, Trump's comments kept Treasury yields on track for their biggest weekly declines since late 2015, while stock markets fell 0.3 percent in Europe.
Fears of a new weapons test by North Korea as a U.S. carrier group sailed towards the region, as well as worries about the forthcoming French presidential election, also kept investors on
edge.
Russian President Vladimir Putin said on Wednesday that trust had eroded between the United States and Russia under Trump, as Moscow delivered an unusually hostile reception to U.S. Secretary of State Rex Tillerson in a face-off over Syria.
"We remain constructive on gold (given) elevated political tensions in both Korea and Syria, coupled with a lower drift evident in U.S. equity markets," INTL FCStone said in a note.
From a technical perspective, gold is facing strong near-term resistance at $1,291 an ounce, the location of a trendline declining from its 2011 record high of $1,920.30 an ounce, analysts said.
On the major physical gold markets, the precious metal was sold at a discount to spot prices in India this week for the first time in six weeks, while demand elsewhere in Asia remained subdued as surging bullion prices deterred buyers.
Among other precious metals, was up 0.11 percent at $18.48. was 0.06 percent lower at $967.95, while fell 0.29 percent to $794.72.