Gold prices edged higher in volatile trading on Friday as investors remained cautious about the developments in the United States and China trade negotiations that helped boost equities to record highs.
US stocks hit record levels on Friday after China said first phase trade talks with US have achieved major progress and that Beijing would cancel tariffs scheduled to take effect on Sunday.
Spot gold was up 0.2% at $1,472.77 per ounce by 11:05 am ET (1605 GMT) and has risen about 1% so far this week. US gold futures were up 0.4% at $1,477.50.
"There is still some question marks on whether the scaling back of existing tariffs will actually take place, but regardless this is a step forward," said Ryan McKay, a commodity strategist at TD Securities, adding in the near term gold will likely trade in a $1,460-$1,480 range.
"They have some framework to scale back the existing tariffs in stages so that is the main bullish part here for risk assets."
The United States has offered to cut existing tariffs on Chinese goods by as much as 50% and suspend new tariffs scheduled to go into effect on Sunday, sources told Reuters on Thursday.
Risk sentiment was also upbeat after British Prime Minister Boris Johnson won a resounding election victory, ending three years of uncertainty since Britons voted to leave the European Union.
"Boris Johnson's win in the UK elections has wiped away the uncertainty around Brexit and news of a US-China deal going through has tamed trade war tensions," said Quantitative Commodity Research analyst Peter Fertig.
Meanwhile, a Democratic-controlled US House of Representatives committee approved charges of abuse of power and obstruction against Republican President Trump on Friday, making it almost certain he will become the third American president in history to be impeached.
The dollar fell against a basket of currencies helping dollar-denominated gold edge higher. Elsewhere, palladium fell 0.8% to $1,925.69 an ounce, having notched up an all-time high of $1,979.95.
"The auto sector is gradually gaining steam and with palladium being used as an autocatalyst in cars, demand is going up, while the supply still remains a constraint," Fertig added. Plagued by a supply deficit, the metal has gained about 5% so far this week, predominantly supported by mine closures across major producer South Africa.
Platinum fell 2% at $925.05 per ounce, but was up about 3% for the week. Silver inched down 0.2% at $16.90 but was set to record its best weekly gain since the end of October.