Gold was stuck near recent lows on Friday and was on track to post its biggest weekly drop in five as strong US economic data backed the case for a near-term increase in interest rates.
A looming US rate hike has dimmed the appeal of non-interest bearing assets as gold, which may explain the fall in the metal from a recent seven-week high even as global equities tumbled on fears over a slowing Chinese economy.
The upward revision in US economic growth in the second quarter to 3.7 percent from the initial estimate of 2.3 percent spurred market expectations that the Federal Reserve could still raise rates this year despite the market turmoil.
Spot gold was up 0.4 percent at USD 1,129.60 an ounce by 0226 GMT, but down almost 3 percent for the week.
The metal touched a one-week low of USD 1,117.35 on Wednesday and has lost more than 3 percent since hitting a seven-week top on Aug. 21.
The robust second-quarter GDP, along with recent strong housing and manufacturing data, will likely prod the Fed to raise interest rates next month, said INTL FCStone analyst Edward Meir.
"For all the talk of market turmoil, it is important to note that the Fed does not typically look at overseas developments to make its rate decision and we don't think this time will be any different," Meir said in a note.
"We are therefore in the minority camp calling for a 25 basis point rate increase next month, with the odds of a hike improving even more should equity markets recover a good portion of their losses by then. This should be a net negative for gold, yet another reason for us to view the complex more bearishly short-term."
US gold for December delivery edged up 0.6 percent to USD 1,129.20 an ounce.
Concerns over a possible US rate increase may have sparked a global stock market rout rather than the devaluation of China's yuan, said Yao Yudong, head of the bank's Research Institute of Finance and Banking.
Yao said the Fed should delay any rate hike to give fragile emerging market economies time to prepare.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, stood at 21.95 million ounces on Thursday, the highest in five weeks.
Spot silver was steady at USD 14.48 an ounce, having fallen to a six-year trough of USD 13.93 on Wednesday. Silver has dropped more than 5 percent this week, its steepest such decline since February.
Palladium climbed 3 percent to USD 576.50 an ounce, extending Thursday's 5-percent rebound from five-year lows. Platinum rose 0.7 percent to USD 1,008.20.
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