Gold bounced back on Friday on a dip in yields and renewed concerns over the U.S. banking turmoil, putting the safe haven on course for its second monthly rise even as steady U.S. inflation reinforced bets for an interest rate hike next week.
U.S. gold futures settled up flat at 1,999.1 on Friday and 0.43% for the week. It also it fifth positive month in six, gaining 0.65%.
The Federal Reserve issued a detailed and scathing assessment of its failure to identify problems and push for fixes at Silicon Valley Bank before the lender's collapse, promising tougher supervision and stricter rules.
The Fed's report culminated around the same time as a decline in 10-year Treasury yields, turning gold positive, "but everything hinges on what (Fed Chair Jerome) Powell's going to say next week", said Daniel Pavilonis, senior market strategist at RJO Futures.
Benchmark yields fell after data showed the pace of overall inflation slowed in March and consumer spending was steady.
But the data also indicated that the underlying price pressures remained strong, prompting traders to add to bets for a rate hike next week.
Elevated rates dull zero-yielding bullion's appeal.
"Gold seems likely to remain in its tight recent range for now, though a weekly close under $1,965 could trigger further losses, while bulls would welcome a push back above $2,000," said Tai Wong, an independent metals trader based in New York, adding it remains in question whether the Fed would signal a pause.
Gold had scaled a one-year peak of $2,048.71 in mid-April as the banking crisis unfolded.
The dollar is headed for a monthly decline, making bullion cheaper for overseas buyers.
Silver rose about 0.4% to $25.04 per ounce, platinum shed 0.2% to $1,074.88, while palladium gained 0.3% to $1,499.32.