Gold fell on Friday, retreating further from this week's three-month high, as US President Donald Trump's promise of a major tax announcement boosted the dollar and the latest economic data fuelled talk of a near-term rise in US interest rates. Disappointment among some buyers at gold's failure to break above the $1,245 an ounce level it tested twice this week also fed into the pull-back, analysts said.
Spot gold was down 0.3 percent at $1,227.33 an ounce at 1445 GMT, while US gold futures for April delivery were $8.40 lower at $1,228.40. On Wednesday, spot gold reached its highest since mid-November at $1,244.67.
The dollar reached a 10-day high against a currency basket on Friday and was on course for its best week since mid-December as Trump's pledge to announce a major tax plan within weeks cooled some market nerves, reinvigorating dollar bulls.
"The Trumpflation trade is back on the agenda, which is negative for gold," Commerzbank analyst Carsten Fritsch said. "I rather see this as a normal breather after the strong gains in the preceding days, not as a start of a longer lasting decline like in November (and) December."
Gold prices remain on track for a second weekly gain, up 0.6 percent from late last Friday.
US economic data has also stoked talk that the Federal Reserve would press ahead with US interest rate hikes sooner rather than later. US import prices rose more than expected in January, while initial jobless claims dropped unexpectedly last week to the lowest in nearly 43 years.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
"Obviously the dollar has recovered a bit of strength in the past day or so, which has weighed on precious metals," Mitsubishi analyst Jonathan Butler said.
"The move above $1,220 was pretty convincing, but we didn't get to the next level at $1,249-$1,250, which would have been confirmation of that bullish trend going back to the start of the year," he said. "What we've seen is possibly some disappointed investors turning tail and booking some profit."
The major physical markets in Asia were mixed this week as Indian jewellers stocked up for wedding season, while rising prices sidelined buyers elsewhere.
Silver was up 0.5 percent at $17.73 an ounce, while palladium was 1.1 percent higher at $778.20. Platinum was down 1.4 percent at $997.75, having touched its highest since October 3 on Thursday at $1,028.50.