Gold has slipped, holding below $US1,300 an ounce as the dollar bounced up off lows as investors pared back bearish positions on the US currency.

Spot gold fell 0.4 per cent to $US1,288.28 per ounce, having reached $US1,297.08 earlier in the session.

US gold futures settled down 0.4 per cent at $US1,287.4 per ounce.

‘Gold today is being driven by a higher dollar and the two generally trade inversely, but overall it’s not changing the technical stance on the asset,’ said Michael Matousek, head trader at US Global Investors.

Matousek said investors are watching to see if gold breaches the $US1,300 or the $US1,275 level.

The dollar index, which tracks the greenback against major currencies, was up 0.4 per cent, recovering from a three-month low.

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

‘Gold has seen some consolidation beneath the psychological $US1,300 level, with a pull on each side of the market,’ said David Meger, director of metals trading at High Ridge Futures.

‘There is some support from the Fed less likely to raise interest rates and yet on the other side a little lesser need for safe haven as we’ve seen a rebound in equities as of late.’

Fed Chairman Jerome Powell said on Thursday the US central bank has the ability to be patient on monetary policy given data showing stable prices, and downplayed suggestions that interest rates would be raised twice more this year.

Global markets have been on the rise for the previous four sessions, but lost steam on Thursday on limited clarity from US-China trade talks and as data from China and France fed worries about the global economy.

In other metals, palladium dipped 1.02 per cent to $US1,312.99 per ounce, a session after scaling an all-time high of $US1,342.43.

‘There is always a potential for some profit-taking in palladium,’ said Capital Economics analyst Ross Strachan.

‘With the fact that reports on the trade front were a bit further away from an agreement than what appeared to be the case this time yesterday, a little bit of the froth in palladium prices is being removed.’

Silver fell nearly one per cent to $US15.60 per ounce, while platinum was down 0.6 per cent at $US820.20.