The dollar hit its highest in nearly 12 years on Friday and is widely expected to reach parity with the euro, due to the gap between U.S. and European market interest rates.
A stronger dollar would continue to cloud the outlook for gold, making it more expensive for holders of other currencies, while higher interest rates usually dent demand for assets that do not pay interest such as bullion.
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In a reflection of bearish sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.28 percent on Thursday to 750.95 tonnes, the lowest since January. It has been three weeks since the fund had any inflows.
Other precious metals have also taken hits. Silver which was on track for a second straight weekly fall, was down 0.3 percent at $15.52 an ounce, while palladium was heading for its worst week since mid-January. Prices were up 0.1 percent at $789 an ounce on Friday.
Its price was down around $786 an ounce on Friday.
Platinum was flat at $1,111 an ounce, having fallen to its lowest since 2009 at $1,108.50 on Thursday.