Gold prices were steady on Friday as a weaker dollar helped offset pressures from an increased appetite for riskier assets following reports of a breakthrough in China-U.S. trade negotiations, while palladium scaled a fresh peak.
Spot gold fell 0.1% to $1,467.20 per ounce by 0452 GMT, but was up about 0.5% so far this week.
U.S. gold futures were down 0.1% at $1,471.60.
Sources said on Thursday U.S. negotiators were offering to cut existing tariffs on Chinese goods by as much as 50% and suspend the new tariffs scheduled to go into effect on Sunday in an attempt to secure a "Phase 1" deal first promised in October.
"The market remains cautious ... Until we see little bit more data around what has been agreed to, investors aren't going to take any aggressive positioning in the gold market," ANZ analyst Daniel Hynes said.
"Gold has been driven by other issues, including central bank easing and low inflation, and that is helping support underlying investors appetite despite headwinds in the shorter term," he said.
U.S. stocks surged to record highs, while Asian equities rose to an eight-month peak, making safe-haven risk-off assets such as gold less appealing.
However, the dollar was hovering close to its lowest since early-July hit in the previous session, which made gold cheaper for investors holding other currencies.
Meanwhile, the European Central Bank kept its monetary policy unchanged on Thursday, while Christine Lagarde struck a more upbeat tone on the economy in her first news conference as its head.
In the previous session, gold scaled an over one-month high before ending the day lower.
Bullion gained after data from the United States showed "higher-than-expected jobless claims" and any signs of weakness in the economy "likely to elicit support for gold," ANZ's Hynes added.
Elsewhere, palladium rose 0.9 to $1,956.75 an ounce, having notched an all-time high of $1,964.56 earlier in the session.
Plagued by supply deficit, the auto-catalyst has gained about 4% so far this week, predominantly supported by mine closures across South Africa, a major producer of the metal.
Both the metals were set to post its best weekly gain since end-October.