Gold prices rose to a six-week high on Friday after weaker than expected U.S. inflation dampened expectations that the U.S. Federal Reserve will aggressively raise interest rates and North Korea fired a ballistic missile, triggering safe-haven buying.
Data on U.S. second quarter gross domestic product (GDP) and labor costs also pushed the dollar lower, making bullion cheaper for holders of other currencies.
"It showed a big fall in annual inflation rates across the board ... so there is no urgency for the Fed to raise interest rates," said Commerzbank analyst Carsten Fritsch.
Gold is sensitive to rising rates because they push up bond yields, making non-yielding gold less attractive, and tend to boost the dollar.
Spot gold was up 0.78 percent at $1,268.31 an ounce by 2:20 p.m. New York time after touching $1,270.38, the highest since June 14. It was on track to rise for a third week in a row.
U.S. gold futures for August delivery settled up 0.7 percent at $1,268.40.