Gold prices fell on Friday and was on track for its third weekly fall for the month, restrained as a slew of U.S. economic data beat expectations and the dollar held near multi-week highs against major currencies.
Spot gold fell 0.4% to $1,499.22 per ounce at 0744 GMT, declining 1% for the week after a near 2% gain last week.
U.S. gold futures were down 0.6% lower at $1,506.01 per ounce.
"A bunch of U.S. economic data came way above the forecasts, like the new home sales data and that along with a strong dollar is weighing on gold right now," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
The National Association of Realtors' pending home sales index rose 1.6% to a reading of 107.3 for August, the association said on Thursday, while economists polled by Reuters had forecast an increase of 0.9%.
The greenback held near multi-week highs against major currencies as heightened risks from political tensions to the Sino-U.S. trade war increased its safe-haven appeal.
A whistle-blower report released on Thursday said U.S. President Donald Trump not only abused his office in attempting to solicit Ukraine's interference in the 2020 U.S. election for his political benefit, but that the White House tried to "lock down" evidence about that conduct.
This added to the uncertainties around the global growth outlook amid a prolonged U.S.-China trade spat.
European shares also rose on Friday, with London stocks outperforming due to a weaker pound, while hopes of a quick resolution to the U.S.-China trade war offset worries of slowing economic growth and rising political risks.
However, investors were cautious on mixed signals from China and the United States on their tariff dispute, which has helped the bullion gain about 17% so far this year.
A number of central banks across the globe, like the Fed, the European Central Bank and Bank of Japan, have cut interest rates to stimulate the economy amid fear of a potential recession.
"If the global economic situation does not improve, we may see central banks around the world cutting down interest rates," said Margaret Yang Yan, a market analyst at CMC Markets.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
China's top diplomat said on Thursday Beijing was willing to buy more U.S. products, and that talks would yield results if both sides "take more enthusiastic measures" to show goodwill and reduce "pessimistic language."
But reports saying Washington is unlikely to allow American firms to supply China's Huawei Technologies undermined hopes of a complete deal between the countries.
Spot gold may test a support at $1,488 per ounce, a break below which could cause a fall towards $1,446, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.