Bengaluru: Gold was on track for a 7.8 per cent quarterly rise on Friday, its best quarter in a year, as uncertainty over US President Donald Trump’s tax and investment plans and a series of elections in Europe fuelled demand for bullion as a safe haven.

Spot gold was down 0.1 per cent at $1,241.32 (Dh4,559) an ounce at 12.13 GMT. US gold futures were down 0.4 per cent at $1,240.60 an ounce. Although well ahead on a quarterly basis, gold fell 0.7 per cent on Thursday, its biggest one-day drop in more than three weeks, after a failure to break resistance at its 200-day moving average triggered technical selling.

It was on track to end the week down 0.2 per cent.

“In the short term, factors including a strengthening dollar could pull prices down to around $1,230 an ounce,” said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.

The dollar was on course for its best week in nearly two months, helped by better-than-expected US economic growth data and comments by the New York Federal Reserve president that reinforced expectations of US interest rate hikes this year.

A stronger dollar makes bullion more expensive for holders of other currencies, while higher interest rates lead to higher bond yields and dampen demand for non-yielding gold.

But gold is underpinned in the coming months by doubts over Trump’s ability to enact tax cuts and investment spending and an uncertain political outlook in Europe.

The buying of gold as a haven from risk, plus a recovery in Indian buying, are likely to push prices to an average $1,259 an ounce this year, GFMS analysts at Thomson Reuters said in their Gold Survey 2017, published on Friday.

A failure by Trump to make progress on his stimulus plans would reduce the chances of a rise in US interest rates in June, Tom Kendall at ICBC Standard Bank said in a note.

“That in turn would likely give gold the impetus to break up through $1,300 again,” he said.

In other precious metals, spot silver was up 0.2 per cent at $18.11 an ounce, having touched $18.29, its highest in four weeks, in the previous session. Silver has risen 13.7 per cent this quarter.

Platinum was down 0.1 per cent at $942 an ounce and is up 4.8 per cent this year.

Palladium was up 0.3 per cent at $795.97 an ounce. The metal used in catalytic converters that curb pollution from vehicle exhausts has risen over 17.3 per cent this quarter.