By Sumita Layek
Gold prices fell on Friday as risk appetite was whetted by comments from White House economic adviser Larry Kudlow that the United States is nearing an interim trade pact with China.
Spot gold was down 0.5% at $1,464.17 per ounce, as of 0754 GMT, but was set to rise about 0.4% this week.
U.S. gold futures were down 0.6% at $1,464.30 per ounce.
Asian stocks jumped, denting bullion's safe-haven appeal, tracking a record S&P 500 finish, as hopes revived that the world's top two economies were nearing a phase 1 deal.
Kudlow said on Thursday, an agreement could come soon.
"There is optimism in the market that the first phase of the trade deal will be signed soon. So, gold and silver prices are falling," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers, adding prices could fall up to $1,420.
A steady dollar index against a basket of six major currencies also weighed on the bullion.
Gold prices have gained more than 14% this year as the on-again, off-again trade spat has roiled financial markets and prompted fears of a global economic slowdown.
A Reuters poll of economists showed a permanent truce is unlikely over the coming year, and, while concerns have eased over a U.S. recession, an economic rebound is also not expected soon.
Ilya Spivak, a senior currency strategist at DailyFx said, risks associated with the political and economical issues like Brexit, Hong Kong and trade talks are "too great for something not to go wrong," and these risks will put a floor under gold prices and if something goes really wrong then prices will go higher.
In Hong Kong, anti-government protesters paralysed parts of the financial hub for a fifth day.
Investors are now awaiting the U.S. retail sales and industrial production data for the previous month, expected later in the day.
Among other precious metals, silver was down 0.8% to $16.87 per ounce. It was poised to gain 0.5% this week, while platinum dipped 0.3% to $877.26 per ounce and was set to register a weekly decline of 1%.
Palladium shed 0.3% to $1,731.08 per ounce, enroute to fall 0.8% this week.
(Reporting by Sumita Layek in Bengaluru; Editing by Shailesh Kuber and Uttaresh.V)