Investing.com - Gold prices recovered on Friday after a three-day losing streak, passing back above the psychological $1,300 handle.
Despite the bounce, the precious metal was still on track for its worst monthly performance since last August as a stronger U.S. dollar and a preference for stocks weighed.
At 8:47 AM ET (12:47 GMT), gold futures for June delivery on the Comex division of the New York Mercantile Exchange gained $6.55, or 0.5%, to $1,301.85 a troy ounce.
Gold pared a weekly loss of about 1%, but remained on course for a drop of nearly 2% in March. By contrast, the U.S. dollar was set for its best monthly performance in the last five months, making dollar-denominated gold more expensive for holders of foreign currencies.
Despite turbulence in equity markets over the last 10 days, the S&P 500 has managed to rise more than 1% during March, while its quarterly advance of more than 12% is set for its best first-quarter performance since 2009.
“If we have a positive outcome from the (U.S.-China) trade talks, gold will be under pressure as investors will rotate out into more risk-seeking assets,” said Jeffrey Halley, a senior market analyst with OANDA.
“But, if we have a disappointing outcome then stocks will go down and people will move into safe-haven assets like gold. The market is very much in a wait and see mode.”
U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing, kicking off a day of talks aimed at resolving the trade dispute between the world’s two largest economies.
Talks are scheduled to continue with Chinese Vice Premier Liu He in Washington next week. While ongoing negotiations could be read as a sign of both parties’ commitment to reach a deal, U.S. President Donald Trump's top economic advisor Larry Kudlow told reporters on Thursday that an agreement could still take months to finalize.
In other metals trading, silver futures rose 0.9% at $15.072 a troy ounce by 8:48 AM ET (12:48 GMT).
Palladium futures advanced 2.2% to $1,338.50 an ounce, while sister metal platinum traded up 1.8% at $858.60.
In base metals, copper gained 2.3% to $2.938 a pound.
-- Reuters contributed to this report.