Gold prices recovered to follow oil towards north in Asian trade Friday, boosted by bargain buying as some investors jumped back to the precious metal from stocks and currencies.
Gold for immediate delivery was seen trading at $ 1198.81 an ounce at 12.00 noon Singapore time while U.S. gold futures for August delivery was at $ 1199.02 an ounce on the Comex division of the New York Mercantile Exchange.
Analysts said purchases from jewellers and other physical buyers across Asia, keeping premiums for gold bars steady.
They however said the bullion is poised for a third weekly drop, the longest run of losses since February, as optimism a recovery in the global economy is under way is curbing demand for the metal as a store of value.
Asian stocks rallied for a second day, with the Nikkei poised for its best week in about four months as risk appetite got a boost from a fall in U.S. jobless claims and an upbeat view on Europe's economy from the European Central Bank.
On Thursday, gold futures edged lower as investors turned their attention to riskier bets such as stocks and oil mildly during the session.
Gold for August delivery declined $2.80, or 0.2%, to $1,196.10 an ounce on the Comex division of the New York Mercantile Exchange, keeping under the $1,200 mark for third time in a row.
Bullion for immediate delivery declined 0.2 per cent to $1195.85 an ounce, taking this week's loss to 1.3 per cent. The metal has weakened 5.5 per cent since touching a record $1265.30 on June 21, reducing this year's gain to 9 per cent.
Meanwhile, holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, decreased 0.45 metric ton to 1,316.04 metric tons as of July 8, according to figures on the company's website.