Gold prices steadied on Thursday off the previous day's four-month high, under pressure from a firmer dollar, while buyers of coins, bars and jewellery in Asian markets held off in anticipation of a further price drop.
The dollar held near a two-week high against a basket of major currencies, as heightening tensions in Ukraine helped support safe-haven demand for the U.S. unit.
Geopolitical concerns and an unexpectedly upbeat report on U.S. new home sales on Thursday helped the dollar to its biggest one-day rise in about a month, prompting selling of gold after the metal hit its highest since Oct. 30 in Asian trading hours.
Spot gold was down 0.1 percent at $1,329.41 an ounce at 1003 GMT, well off Thursday's high of $1,345.35 an ounce.
"Given the lack of serious physical demand, bullion remains at the mercy of investor and dollar sentiment," Andrey Kryuchenkov, an analyst at VTB Capital, said. "The inverse correlation to the U.S. dollar is at highs for the year."
"The market had run ahead of itself and players will be taking profits on the latest run higher ahead of important macro numbers next week," he said.
Analysts are awaiting U.S. jobless claims data at 1330 GMT as a precursor to next Friday's U.S. non-farm payrolls report for Febrary, a key indicator of the health of the world's biggest economy.
A spate of below-consensus U.S. data has curbed expectations that the Federal Reserve would step up tapering of its bullion-friendly monthly bond-buying programme, which prompted much of last year's fall in gold prices.
Gold has risen more than 10 percent so far this year on uncertainty over the pace of the U.S. economic recovery, worries about growth in China and renewed interest in bullion-backed exchange traded funds.
U.S. gold futures for April delivery were up $2.20 an ounce at $1,330.10.
PREMIUMS EASE IN ASIA
In the physical market, premiums for gold bars in Singapore slipped to as low as 80 cents to the spot London prices from a high of $1.50 last week after a recent increase in prices spurred sales of scrap.
"We are quoting premiums at 80 cents to $1 now because the market is flooded with supply, given the low demand," said a dealer in Singapore.
Silver was up 0.6 percent at $21.33 an ounce, recovering some lost ground after falling 2.8 percent the previous day, its biggest price drop in a month.
"That silver struggled to break convincingly through $22 was... likely to frustrate investors," UBS