After declining 1.4pc on Thursday, spot gold rose 0.5pc at $1,734.27 per ounce by 0747 GMT. U.S. gold futures climbed 0.9pc to $1,737.
Bullion had rallied to its highest since October 2012, on Monday, but has since lost ground and is now heading for a 0.4pc weekly decline.
"The fundamentals are still supportive for gold. But, there was a slight improvement in the manufacturing activity in Europe and the U.S., the PMI data last night was slightly better," said Avtar Sandu, a senior commodities manager at Phillip Futures.
The euro zone economy's contraction eased in May, the Purchasing Manager Index (PMI) survey showed. Germany's private sector recession also improved on loosening of lockdown curbs.
However, U.S.-China frictions dampened risk appetite, supporting bullion and offsetting pressure on the metal's prices from the slightly better data.
Asian shares fell after Beijing's plan to impose new national security legislation on Hong Kong drew a warning from U.S. President Donald Trump.
Adding to uncertainties, China dropped its annual growth target for the first time.
Gold has held ground above the key $1,700 per ounce level, building impetus to reach its 2011 peak in the coming quarters, Fitch Solutions said in a note.
The lower-for-longer interest rates with quantitative easing in full swing, macro and geopolitical uncertainty and strong investor flows should continue to support gold prices on a 6-12 month horizon, Fitch added.
Palladium fell 0.2pc to $2,008.93 per ounce, but was looking to post its best week since the end of March.
Platinum slid 1.7pc to $818.64 and silver eased 0.4pc to $16.99.