Gold gained on Friday as intensifying US-China tensions compounded fears of a slow recovery in a global economy already reeling from the coronavirus pandemic.

Spot gold rose 0.4% to $1,732.62 per ounce by GMT. by 12:24 p.m. EDT (1624 GMT), after falling 1.4% on Thursday, and was headed for a small weekly decline. US gold futures was up 0.6% to $1,732.30.

"China's aggressive stance on Hong Kong security could exacerbate already tense relations (with the United States) and a possible confrontation between US warships and Iranian freighters headed for Venezuela are key concerns heading into the long weekend, prompting investor buying," said Tai Wong, head of base and precious metals derivatives trading at BMO.

US-China friction came to the fore again over the source of the coronavirus and escalated further with China's proposal to impose security laws on Hong Kong, drawing flak from Washington.

The tensions compounded fears of a slower global economic recovery, pressuring equity markets but supporting the US dollar, also considered a safe haven.

"Rising trade tensions in the past initially resulted in the USD benefiting primarily from safe haven flows, but escalating tensions on a global basis boosted a flight to safety in both gold and the USD," said Standard Chartered Bank analyst Suki Cooper.

"The wider economic and health uncertainty are likely to keep gold prices underpinned. ... Prices are facing technical resistance around $1,765."

Heightening economic woes, Beijing dropped its annual growth target for the first time.

Gold, considered an insurance during political uncertainty, scaled an over 7-1/2 year peak earlier this week. On the physical side, demand picked up in top Asian hubs as economies eased lockdowns.

Elsewhere, palladium fell 4% to $1,933.05 per ounce, but was on track for its strongest week since March. Platinum rose 0.3% to $834.54 per ounce and silver was 0.3% higher at $17.10.