Spot gold was up 0.3% at $1,866.87 per ounce by 01:54 p.m. ET (1854 GMT), en route to a weekly gain of about 2.8%. U.S. gold futures settled up 0.3% at $1,868.5 per ounce.
Gold has gained as much as $110 since Nov. 3, bolstered by deepening fears of inflation and reassurances from key central banks that interest rates would remain low for the time being.
Prices fell nearly 1% earlier in the session.
"It's a corrective day. Traders are taking profits after an incredible run. Logically, if you are not taking something off the table with a $100 rally, you'd be kind of foolish," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Bullion has also shrugged off strength in the dollar this week as data showing a big jump in U.S. consumer prices in October took centre-stage. A stronger U.S. currency typically dampens demand for bullion among buyers holding other currencies. [USD/]
Societe Generale analysts forecast gold prices to average $1,950 an ounce in the first quarter of 2022, given the "renewed commitment from the Federal Reserve to support the economy while letting inflation printing higher."
Reduced stimulus and interest rate hikes tend to push up government bond yields and raise the opportunity cost of holding gold, which pays no interest.
Limiting any upside in gold, yields on the benchmark 10-year note edged higher.
Elsewhere, spot silver gained 0.4% at $25.32 per ounce and palladium rose 2.8% to $2,116.45 per ounce. Platinum fell 0.2% to $1,083.49.
(Reporting by Amy Caren Daniel in Bengaluru; editing by Arpan Varghese)
By Amy Caren Daniel
