Gold prices edged up from six-month lows on Friday as the dollar slipped, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further.

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Spot gold was up 0.2 percent at $1,268.84 an ounce, by 1345 GMT. In the prior session, bullion touched $1,260.84, its lowest since Dec. 19, 2017.

U.S. gold futures for August delivery added 0.1 percent to $1,271.10 per ounce.

"If the dollar is weaker and gold is not reacting much, that`s usually a bad sign, that means that you`ll probably get more downside," Georgette Boele, commodity strategist at ABN AMRO in Amsterdam, said.

"People think that since gold failed at the $1,300 level, they are seeing how far they can push it down and then move it up again. I would say it should bottom out anywhere between $1,250 and $1,200."

Gold tumbled last Friday after repeatedly failing to surmount the $1,300 level as speculators rushed to liquidate long positions and others put on bearish positions.

The dollar pulled back from an 11-month peak against a basket of major currencies on Friday, as the euro strengthened after a survey showed Euro zone private business growth recovered in June.

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.

Commerzbank agreed that gold was unlikely to recover in the near-term even with potentially destabilising events such as the Turkish presidential election on Sunday and a European Union summit later next week.

"If gold is not even in demand as a result of the escalating trade dispute between the U.S. and China, we do not believe that the other upcoming events will do much to sway the opinion of market participants," a note from the German bank said.

Holdings of SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, dropped 0.5 percent to 824.63 tonnes on Thursday.

In Asia, gold demand picked up in most centres this week as prices slid to a six-month low, with gold being sold at a premium in India for the first time in seven weeks. Many buyers, however, were waiting for prices to fall further.

Auto catalyst metals platinum and palladium rose 0.4 percent to $865.24 per ounce and added 0.5 percent to $955.30 per ounce respectively, but were headed for weekly declines of over 2 percent.

Earlier in the session, platinum touched $851.74, the weakest since February 2016, while palladium slipped to a seven-week low of $947.15 an ounce.

Silver gained 0.4 percent to $16.37 an ounce after falling to its lowest since May 2 at $16.16 in the previous session.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)