Gold fell on Friday as investors cashed in profits following a 1.2 percent gain in the previous session on improving demand for the metal on signs US and European central banks will continue loose monetary policies in the medium term. "We have seen little selling coming into the market which is understandable given gold is about $20 higher from the lows traded in Asia on Thursday," MKS Group trader Jason Cerisola said, adding that gold has very good support at $1,310 level.
Spot gold edged down 0.3 percent at $1,326.38 an ounce at 0700 GMT. Bullion is set for an about 1 percent decline for the week. US gold slipped 0.4 percent at $1,326.30 an ounce. Spot gold may retest a support at $1,313 per ounce, as its bounce caused by this barrier could have more or less completed, Reuters technical analyst Wang Tao said. "We are going through a bout of voidness in post the Brexit referendum where some liquidation of recent decisions have certainly weighed on gold prices," ANZ analyst Daniel Hynes said.
"But everything else is still very conducive for the growth of investments (in gold). Once we just watch out for any short-term positioning that we saw coming just after the referendum, we will continue to see support for gold prices." Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22 percent to 963.14 tonnes on Thursday.