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Spot gold turns higher as Turkish PM says military coup underway

Spot gold prices turned higher, reversing earlier losses in late trade on Friday in New York after Turkish Prime Minister Binali Yildirim said a group within the country's military has attempted to overthrow the government.

Spot gold was up 0.21 percent at $1,337.45 per ounce, moving off intraday lows of $1,322.

U.S. gold futures were down 0.36 percent at $1,337.70.

"Gold has been frog-marched $10 higher over the last hour when it became apparent that there has been an attempted coup in Turkey," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

"Gold hasn't been a very good geopolitical hedge in recent years, though sentiment may have changed especially if it suggests instability in other governments in the region."

Earlier, spot gold eased 0.54 percent to $1,327.50 an ounce. It fell to its lowest since June 30 in the previous session.

"In the short term, we can see some more pressure towards $1,300 as the focus is back on the U.S. after strong economic data, which increases the probability of a rate hike before the end of the year," Commerzbank analyst Carsten Fritsch said.

Higher U.S. rates tend to damage gold prices because they increase the opportunity cost of holding non-yielding bullion.

After six weeks of gains, the longest rally since March 2014, the metal has come under pressure this week, down 2.5 percent so far. It was hit by strong U.S. non-farm payrolls data and as uncertainty around the implications of Britain's Brexit vote eased with the formation of a new government.

U.S. gold fell 0.34 percent to $1,328.06 an ounce. Gold futures settled at $1327.40 an ounce on Friday.

"Investors are taking profits, but $1,300 is now a floor for gold and that is going to hold moving forward," ING Bank senior strategist Hamza Khan said.

"Wider political issues such as the U.S. elections and then French and German elections next year are enough to support gold even though markets are rallying on the low interest rates environment and the quest for yields."

The dollar was set for its biggest weekly gain against the yen in 17 years and was up 0.49 percent versus a basket of six currencies, making gold more expensive to foreign holders.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.25 percent to 962.85 tonnes on Thursday.

Consumers in Asia took profits on their gold holdings as a price rally last week helped bullion hit its highest in more than two years, keeping new buyers at bay despite jewellers offering steep discounts in second-top consumer India.

Among other precious metals, spot palladium touched its highest since early November at $652 an ounce.

Spot silver was down 1.03 percent at $20.09 an ounce. It was marginally lower for the week, and near its first weekly loss in seven.

Spot platinum slipped 1 percent to $1,088.