Gold prices edged higher on Friday and were set for their first weekly gain in one month, supported by a softer dollar and caution about developments in Sino-US trade talks. Spot gold was up 0.3 per cent at $1,503.20 per ounce, as of 0353 GMT, and was on track for its first weekly gain in four, having risen nearly 1 per cent so far this week.

US gold futures were also up 0.3 per cent at $1,510.9 per ounce. A weaker US dollar is giving gold a little bit of an upward drift,” Michael McCarthy, chief market strategist at CMC Markets said, adding that “prices are still very much in the middle of a trading range and pinned to $1,500 level.”

The dollar nursed losses against most major currencies on Friday, as central banks in Switzerland and the UK refrained from cutting rates, while risk appetite ebbed on caution about US-China trade talks. “Investors are all waiting on any further developments in the trade negotiations as they move towards October meeting and that may provide next big driver for gold prices,” McCarthy said.

US and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months on Thursday, trying to lay the groundwork for high-level talks in early October.

Gold prices have risen about 17 per cent this year mainly on the back of a the US-China trade tensions, concerns over the outlook for the global economy and the prospect of monetary easing by central banks. The Fed had cut interest rates for the second time this year on Wednesday to help sustain economic expansion but gave mixed signals on future rate cuts.

The precious metal will remain supported as investors deliberate heightened market risks and accommodative economic policies for the near term, Phillip Futures analyst Benjamin Lu said in a note. On the technical front, signals are mixed for spot gold as it is stuck in a narrow range of $1,488-$1,514 per ounce, according to Reuters technical analyst Wang Tao.

Elsewhere, palladium gained 0.7 per cent to $1,634.74 per ounce, having earlier climbed to a fresh record peak of $1,635.55. Platinum rose 0.5 per cent to $942.00 per ounce and silver was up 0.6 per cent at $17.88.