US gold futures, along with other precious metals, resumed their uptrend early on Friday after a brief slip following a government report that lifted the dollar when it showed the US trade gap widened by less than expected, traders said.
But the dollar capitulated and gold promptly advanced when investors looked past headline data in the trade report at US import prices that were double forecasts.
"The balance of trade deficit was friendly to the dollar, the import prices were a little negative. And the dollar seemed to be more reactive to the import prices. So with the weaker dollar comes firmer metal trade," said AG Edwards commodity commentator Jimmy Quinn in New York.
August delivery gold was up $6.60 at $620.40 an ounce at the New York Mercantile Exchange's COMEX division, and traded from $608 to $622 per ounce.
On Thursday, gold fell to its cheapest level since April 17, and other precious metals had slipped to multi-week lows.
Gold traders took their cues from the dollar's retracement and others grabbed gold as an inflation hedge.
"The overall import prices were as expected, but the consumer prices were a bit above where they have been. When you are in a period of inflation phobia, that is not good news," said Keith Hembre, FAF Advisors chief economist in Minnesota.
Spot gold rose to $615.10/6.10 an ounce, up from $609.50/610.20 an ounce at the New York close. Friday's afternoon fix in London was $616 per ounce.
Other precious metals also rallied, with COMEX July silver shooting up 30.5 cents, or 2.75 percent, to $11.38.
Spot silver traded up to $11.36/1.46 an ounce, higher than $11.09/11.19 an ounce at Thursday's finish. Silver was fixed at $11.41 in London. Over at NYMEX, July platinum rose $12.40 an ounce to $1,202.50. Spot platinum was higher at $1,199/1,207.
September palladium increased $7.45 to $330 an ounce, above an almost three-month low at $313. Spot rose to $324/329 an ounce.