Gold prices edged lower on Friday as slightly weaker U.S. inflation and consumer spending data did little to dampen expectations of an interest rate hike in December.
Spot gold was on track to register a 2.8 percent decline in September, its largest monthly fall so far in 2017 and the biggest since November 2016, after the dollar strengthened.
However, it was set to end the quarter 3.5 percent higher as it rallied in July and August, partly due to geopolitical tensions including North Korea's missile tests.
U.S. data showed inflation remained benign in August with the core personal consumption expenditures (PCE) price index rising 1.3 percent year-on-year, after advancing 1.4 percent in July.
The core PCE is the Federal Reserve's preferred inflation measure and has a 2 percent target.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.