Gold fell more than 1 percent on Friday as the dollar advanced versus the and the euro, putting the metal on track to post its second straight weekly loss, while silver was set for its third consecutive weekly rise.
The dollar was up 2 percent against the yen on speculation the Bank of Japan was considering applying negative rates to its lending program for financial institutions, effectively starting to pay banks to borrow its cash.
Spot gold was down 1.24 percent at $1,232.96 an ounce, below Thursday's five-week high of $1,270.10 an ounce. The U.S. futures contract for June delivery settled down 1.6 percent at $1,230 an ounce.
Spot silver turned lower and was down 0.4 percent at $16.93 an ounce, below the prior session's 11-month high of $17.69. It was up 4.6 percent for the week.
"After yesterday's five-week high, gold today is succumbing to the strength of the dollar against the yen and the euro," ActivTrades chief analyst Carlo Alberto de Casa said.
"Prices should, however, remain in range and only a close below $1,225 will put on additional selling pressure."
Goldman Sachs maintained its bearish view on gold and other commodities on Friday, and reiterated its recommendation to short gold.
"We continue to expect that the strengthening of the U.S. labor market will force the Fed to hike rates three times this year, which will lead to a stronger dollar and a gradual increase in U.S. real rates, pushing gold down," Goldman analysts said in a note.
The U.S. Federal Reserve will meet for a two-day policy meeting April 26-27.
Silver's rally this week has been helped by optimism over Chinese growth, and a break above key chart resistance.
"Huge ETF accumulations in silver continue. The spec money has been plowing into silver. If gold were to break down, you could see a bloodbath in silver," said Bill O'Neill, co-founder of commodities investment firm Logic Advisors in New Jersey.
HSBC said the gold and silver rallies could be running into headwinds.
"For silver, we favor the market above $17, but expect volatility and further gains may be hard to hold," it said.
Among other precious metals, platinum was down 1.3 percent at $1,007.60 an ounce but still set to log its strongest week in seven with a 3 percent rise.
Palladium was down 0.17 percent at $600 an ounce and poised for a weekly rise of 7 percent, after climbing to $618.28, its highest level since November.