Gold prices held steady on Friday and were on course for their first weekly gain in three, as the dollar plumbed to fresh five-week lows after the US central bank's signal of a slower pace of rate increases this year disappointed dollar bulls.
The US Federal Reserve delivered an interest rate increase earlier this week as widely anticipated, but did not alter its earlier forecast for a total of three rate increases this year, dashing hopes of dollar bulls who had waited for hints of a possible fourth hike in 2017.
The dollar index, which measures the greenback against a basket of currencies, hit a fresh 5-week low of 100.160 on Friday.
Spot gold was nearly unchanged at $1,226.31 per ounce by 0739 GMT after hitting its highest since March 6 in the previous session, while US gold futures were little changed at $1,226.20.
"What's happening now is just an inverse trade against the dollar. If there is a risk-averse sentiment, we can see both the gold and dollar rising together, especially after a Fed rate hike," said Jiang Shu, chief analyst at Shandong Gold Group.
Holdings of SPDR Gold Trust fell 0.28 percent to 837.06 tonnes on Thursday from 839.43 tonnes on Wednesday. The world's largest gold-backed exchange-traded fund saw outflows after three straight session of inflows this week.