Gold shook off initial losses to post modest gains in volatile trade on Friday as risk sentiment soured on US President Donald Trump's threat to impose new tariffs on China, but bullion was still on track for its worst week since mid-March.

Spot gold climbed 0.9% to $1,694.56 per ounce by 11:37 a.m. EDT (1537 GMT).

US gold futures rose 0.7% to $1,706.80. "We saw some weakness in the US equities markets... It seemed Trump was hinting at a resurgence of the trade war," said Phil Streible, chief market strategist at Blue Line Futures in Chicago.

Gold tends to benefit from widespread stimulus as it is often seen as a hedge against inflation and currency debasement.

Palladium fell 2% to $1,920.20 per ounce, on track for its fifth straight weekly decline. Platinum shed 0.5% at $768.74 per ounce, while silver fell 0.6% to $14.85.