Gold prices slid to seven-month lows on Friday as the dollar rose due to easing trade tensions and weak demand for the precious metal on expectations of higher U.S. interest rates. Spot gold was 0.5 percent lower at $1,240.11 an ounce at 1358 GMT from an earlier $1,236.58, its lowest since Dec. 12. U.S. gold futures slipped 0.5 percent to $1,240.9 an ounce.

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Gold prices are down about 9 percent since mid-April. Tensions between the United States and China eased after U.S. Treasury Secretary Steven Mnuchin said on Thursday talks between the world`s two largest economies could be reopened if Beijing was willing to make significant changes.

A rising U.S. currency makes dollar-denominated gold more expensive for holders of other currencies, which potentially weighs on demand.

"When the dollar rises we see gold falling, but when the dollar falls we don`t see gold recovering because there is very little appetite for gold at this time," said ActivTrades analyst Carlo Alberto De Casa. "Higher interest rates in the U.S. means holding gold costs money."

Gold does not earn any interest or dividends and costs money to store and insure.

The Federal Reserve last month raised its benchmark overnight lending rate 25 basis points to 1.75-2.0 percent. Expectations are for another two rate rises this year and three in 2019.

Investors retreating from gold can be seen in the largest gold-backed exchange-traded-fund (ETF), New York`s SPDR Gold Trust GLD, which has seen its holdings fall more than 8 percent since late April to below 26 million ounces.

On the technical front, any attempts on the upside will meet resistance at the 21-day moving average, currently around $1,258, while support is at $1,237.32, the low on July 3 followed by the December trough at $1,352.92.

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Silver fell 0.9 percent to $15.75 an ounce, platinum lost 1.6 percent to $825.80 an ounce and palladium was 1.0 percent lower at $940.10.

"The global trade dispute is threatening to disrupt auto sales, placing a question mark over platinum and palladium demand," ANZ analysts said in a note.

"While auto sales numbers suggest steady demand growth for palladium, expect a moderate decline in auto catalyst demand for platinum this year."

More platinum than palladium is used in diesel engines, whose sales have fallen since Volkswagen was found in 2015 to have cheated in emissions tests.