Gold jumped to session highs during Friday afternoon trading in Europe, erasing earlier losses as negative US economic data weighed on the dollar, traders said.
Much-anticipated data on inflation, trade and consumer sentiment came in below forecasts, denting the dollar/euro rate.
"It is up on the dollar (weakness), and as the market was running a bit short there was also some covering ahead of the weekend. There is some resistance at the highs, though," a trader said.
Conditions were busy after a slow morning, although the market remained broadly rangebound, they said.
"It is stuck between $392.00 and $398.00, and we've got near both of those levels over the last two days," the trader said.
July producer prices rose 0.1 percent, less than the expected 0.2 pct, while the June trade gap widened to $55.8 billion, against a forecast $47 billion.
The subsequent University of Michigan August consumer index - at 94.0 percent, down from a previous 96.7 pct - further undermined the dollar. It was at $1.2335, versus $1.2220 prior to the day's data.
Traders said the data indicated a slowing US economy, which decreased the possibility of further interest rate hikes in the short-term.
Weaker-than-expected July non-farm payrolls last week raised doubts over the strength of the US economy, and investors are poring over every new set of data to estimate the pace of future dollar-boosting rate hikes.
Record high oil prices have fuelled worries over inflation, but the Federal Reserve has said any inflationary pressure is likely to subside over the next months as oil prices slide off unsustainable highs.
By 1427 GMT, spot gold was at $397.20/397.70 from $393.95/394.45 at Thursday's close in New York.
Spot silver bounced as well, rising to $6.59/6.62 from $6.51/6.54 in New York.
Platinum was at $855.00/860.00, from $845.00/850.00, while palladium was steady at $210.00/215.00 versus $209.00/214.00 in late US trade.