Gold was flat on Friday after a late rally erased initial losses and bullion ended the week nearly 3 percent higher as wariness over the U.S. Federal Reserve's message at next week's monetary policy meeting pushed the dollar down.
Bullion's third consecutive weekly rise marked its longest weekly winning streak since March, prior to the two-day $225 selloff in mid April.
A rally to climb back over a key technical threshold at $1,300 an ounce earlier in the week prompted speculators fearing a reversal of the recent downward price trend to rush to buy back bearish bets.
On Friday, sharp losses in industrial metals across the board more than offset the dollar's fall to a five-week low, which was driven by speculation the Federal Open Market Committee (FOMC) will emphasize next week its intention to keep interest rates low for longer.
"It is understandable that money managers be wary of any slight change in verbiage from the Fed in these low interest-rate days," said Carlos Perez-Santalla at brokerage Marex Spectron.
Spot gold fell 0.2 percent to $1,330.30 per ounce.
Traders said some profit-taking was seen as buyers cashed in from gold's Friday session high of $1,340, about $160 higher than the three-year low hit June 28.
U.S. gold futures for August delivery settled down $7.30 at $1,321.50 an ounce, with trading volume about 15 percent higher, preliminary Reuters data showed.
Bullion has gained more than 9 percent in three weeks after the Federal Reserve in late June assured financial markets it would only start phasing out its monetary stimulus when it was sure the U.S. economy was strong enough to stand on its own.
Bullion has lost a fifth of its value this year as investors feared recovery in the United States might prompt the Fed to scale back its $85 billion monthly bond purchases. Outflows from gold exchange-traded funds (ETFs) have also weighed.
Physical demand in sharp focus
Investors now digest news that JPMorgan Chase said it was considering a sale or a spin-off of its physical commodities business, including its holdings of commodities assets and its physical trading operations, as regulators increase scrutiny of Wall Street's role in commodities.
The U.S. bank said it will remain fully committed to its traditional banking activities in the commodity markets, including financial derivatives and the vaulting and trading of precious metals.
Separately, latest data showed a mixed bag of central-bank gold activities.
Russia, Ukraine and Azerbaijan were among eight countries that increased their gold holdings in June, data from the International Monetary Fund showed, while Turkey, Germany and seven other countries shed some of their bullion.