Gold regained some ground on Friday after a drop of nearly 3% in the last session, but a firm dollar kept bullion on course for a weekly decline with the focus still on an upcoming U.S. Federal Reserve meeting.
Spot gold rose 0.7% to $1,765.73 per ounce by 0925 GMT, while U.S. gold futures gained 0.6% to $1,766.30.
Bullion slipped nearly 3% on Thursday after an unexpected increase in U.S. retail sales raised expectations that the Fed may reduce its stimulus sooner, which also drove a rally in the dollar.
The dollar held close to a near three-week peak on Friday, increasing gold's cost for buyers holding other currencies, and putting bullion on course for a 1.2% decline this week.
"Everybody is watching the Fed like hawks. It would be very tempting after a $40 fall (to look for an entry point) despite the fact that the tapering debate is still going," StoneX analyst Rhona O'Connell said.
"Investors are going to scour Jay Powell's press conference for economic projections," O'Connell said, adding that a really hawkish shift from the Federal Open Market Committee (FOMC) would not stop the possibility of another knee-jerk downward reaction in gold even if it had been priced in already.
The FOMC meeting is due on Sept. 21-22.
But the bounce in gold driven in part by short-covering "looks anaemic and gold faces another test of $,1750 as the dollar remains firm", said Jeffrey Halley, a senior market analyst for Asia Pacific at OANDA.
Unwinding of economic support measures not only dim gold's status as a safe haven but any subsequent increase in interest rates would translate to a higher opportunity cost of holding non-yielding assets like bullion.
Silver rose 0.7% to $23.08 per ounce, after hitting its lowest in more than a month on Thursday.
Platinum rose 1.7% to $948.66, while palladium gained 0.5% to $2,043.29.