New York, London: Gold inched higher on Friday as the US dollar slid lower after strong US economic growth data while concern remains about trade tensions between the United States and Europe.

The dollar slipped against a basket of currencies as data showing the US economy rang up its strongest quarter in nearly four years failed to erase worries that trade frictions would be a drag in the second half of 2018.

The greenback gave up initial gains after the US government reported gross domestic product grew at a 4.1 per cent annualised pace in the second quarter, matching the median forecast among economists polled by Reuters.

“The dollar weakened and treasury yields came off,” said Walter Pehowich, executive vice-president of investment services at Dillon Gage. “Dollar weakness looks like it will continue and gold will see some short-term support.”

A weaker dollar makes dollar-priced gold less expensive for non-US investors.

Benchmark 10-year US Treasury yields slipped from their highest level in one-and-a-half months.

Spot gold edged up 0.1 per cent to $1,223.46 (Dh4,493.76) an ounce 1:31pm. EDT (1731 GMT), having hit a one-week low of $1,216.93, and was on track for its third consecutive weekly decline, of about 0.5 per cent.

US gold futures for August delivery settled down $2.70, or 0.2 per cent, at $1,223 per ounce.

In the physical markets, gold demand in India improved this week as domestic prices traded near a six-month low, while weaker rates in Singapore prompted a pickup in demand there.

Demand remained weak, however, in top consumer China as the yuan fell.

“We believe price action [in gold] is likely to be subdued in the coming weeks [as] physical demand is in the middle of a seasonally slow period, short interest in gold has risen as prices have fallen and there are 200 tonnes of loss-making ETF positions that could be liquidated,” Barclays said in a note.

Spot gold is expected to fall into a range of $1,206-$1,214 an ounce, Reuters technical analyst Wang Tao said.

“A key level of resistance will be $1,236, the double-bottom from a couple weeks ago,” Pehowich added.

Among other precious metals, silver rose 0.5 per cent at $15.45 per ounce, but was heading for its seventh weekly decline. It earlier hit a one-week low at $15.29 an ounce.

Palladium dropped 0.9 per cent at $918.70 per ounce, but was heading for its biggest weekly gain since the week of April 20, a nearly 3 per cent rise.

Platinum rose 0.1 per cent to $823.75 and was on track for a 0.3 per cent weekly rise.