Gold traded little changed on Friday amid pressure from a stronger dollar, but was headed for its biggest monthly fall this year amid rising prospects of a US rate hike in December.
Spot gold was nearly unchanged at $1,286.96 per ounce as of 0720 GMT, on track to register a 2.5 per cent decline in September, its largest monthly fall so far in 2017 and the biggest since November 2016. However, it was set to end the quarter around 3.7 per cent higher.
US gold futures rose 0.1 per cent to $1,289.70 per ounce.
Gold is mostly being influenced by the dollar's movements in an otherwise quiet session, said Yuichi Ikemizu at ICBC Standard Bank in Tokyo.
The US dollar inched higher and was on track for its biggest weekly gain this year as investors pondered the Trump administration's tax plan and the outlook for US Federal Reserve policy.
“(Gold) will likely continue to struggle in the short term against a backdrop of higher interest rates, particularly in the US and possibly in the UK and Europe,” said INTL FCStone analyst Edward Meir.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
Meanwhile, palladium gained 0.7 per cent to $935.70 per ounce. It was up 11 per cent for the quarter and 38 per cent so far in 2017.
Platinum rose 0.5 per cent to $924 per ounce. The metal is set for a 7.1 per cent drop for September, its worst performing month since March. Palladium traded at a premium to platinum for a third straight day after prices for the two metals hit parity for the first time since 2001 on Wednesday.
“Palladium is short-supplied and also there's very good demand from auto sectors. As long as this situation continues, we'll see a premium in palladium ,” said Ikemizu. “If it goes on for a long time, car makers will have to switch from palladium to platinum, which was unthinkable in the past ... (However,) This current reversal probably won't be long enough for car makers to decide on substitution.”
Both metals are primarily consumed by automakers for catalytic converters, but platinum is more heavily used in diesel vehicles that have fallen out of favour.
Meanwhile, silver edged 0.1 per cent higher to $16.84 per ounce and was on track for a 4 per cent loss on month, but was set to end the quarter 1.7 per cent higher.