Gold prices closed the week with a fall of more than one per cent as the US dollar firmed against the British sterling and the euro, after British Prime Minister Theresa May said the European Union must supply an alternative Brexit proposal.

China’s moves to boost domestic consumption also helped bolster the dollar rally driven by investor bets that the latest US-China trade salvoes were unlikely to dent global growth.

The dollar’s status as the chief reserve currency makes it the prime beneficiary of US-China trade conflict, with the United States seen as having less to lose.

‘A big selloff in the pound and euro sent the dollar sharply higher. And gold, being dollar-denominated, fell as a result of that,’ said analyst Fawad Razaqzada.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Spot gold lost 0.8 per cent at $US1,196.86 per ounce on Friday.

During the session it touched its lowest since September 11 at $US1,191.51. However, gold headed for a 0.4 per cent weekly increase.

US gold futures for December delivery settled down $US10, or 0.8 per cent, at $US1,201.30 per ounce.

The euro and the pound fell after British Prime Minister Theresa May said the European Union must come up with an alternative to her Brexit proposals, saying talks had reached an impasse after the bloc’s leaders rejected her plans without explaining why.

Investors await next week’s Federal Reserve meeting, where the US central bank is widely expected to raise benchmark interest rates.

Higher US interest rates tend to make gold less attractive since it does not pay interest and costs money to store and insure.

In other precious metals, spot silver rose 0.1 per cent at $US14.29 an ounce, after rising to two-week highs of $US14.43.

‘The factors driving silver are much more industrial-related,’ said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments’ ETF Securities.

Silver is closing the week up about two per cent.

Palladium touched its highest since April 19 at $US1,056.72 per ounce before retracing gains to trade about flat on the day but with a weekly rise of more than seven per cent, the biggest weekly per centage gain since April.

Platinum fell 0.4 per cent at $US828.70 after hitting its highest since August 9 at $US838.40.

The metal is closing the week more than four per cent higher, the strongest weekly gain since January.