Gold edged up on Friday on a weaker dollar, but the yellow metal was on track for a seventh straight weekly decline amid expectations that the US Federal Reserve will opt for more interest rate hikes in 2017.

Spot gold edged up 0.2 per cent to $1,131.36 an ounce by 0639 GMT. US gold futures rose 0.2 per cent to $1,133 per ounce.

New orders for US-made capital goods rose more than expected in November. Other data on Thursday showed that third-quarter U.S. economic growth beat expectations.

But the number of Americans applying for unemployment aid hit a six-month high last week and US consumer spending increased modestly in November.

“There is not much reaction (to the news) because the pre-holiday liquidity is very tight,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

“It is very difficult to gauge the short term direction," Lau said, adding that gold might move according to the dollar.

More consistent evidence of US economic strength could prompt the Fed to tighten credit again sooner than later. Higher rates discourage buying of non-interest-paying bullion, which is priced in dollars.

The dollar hovered below the 14-year high set earlier this week. The dollar index, which measures the greenback against a basket of currencies, was down 0.1 per cent to 102.980.

“Low volatility may be contributing to gold's weakness," said HSBC analyst James Steel, adding that the heavy drop in the gold exchange traded funds is weighing on the market.

Holdings of SPDR Gold, the world's largest gold-backed exchange-traded fund, have fallen over 12 per cent since November.

“Gold is on the defensive but we sense support in the market between $1,120-1,100 and believe these levels will hold barring a significant dollar rally.”

Asian stocks stepped back in subdued trade on Friday as Wall Street took a breather from its relentless rise since the US election, while the dollar hovered below the 14-year high set earlier this week.

Spot gold remains neutral in a range of $1,121 to $1,137 per ounce, and only an escape could indicate a direction, according to Reuters technical analyst Wang Tao.

Silver was mostly flat at $15.82. Platinum was steady at $903.49 and palladium fell 0.2 per cent to $653.35. Platinum has lost over 2 per cent, while palladium has dropped over 6 per cent so far this week.

“The declines in the platinum group metals are steep but we do not see a clear fundamental reason for the drop and suspect they were down in low volume,” HSBC analyst Steel said. HSBC lowered its platinum price forecast for 2017 and raised palladium forecasts.

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