LONDON Gold rose on Friday, after dropping for four of the past five sessions, as falling equity markets underpinned demand for assets perceived as safer.
European shares dropped, following losses in Asian markets, to 3-1/2-year lows on renewed oil price weakness and disappointing Chinese data.
Spot gold rose 0.6 percent to $1,084.28 an ounce by 1256 GMT, while U.S. gold futures gained 1 percent to $1,084.10. Spot gold was down nearly 2 percent for the week, the biggest weekly loss since Nov. 6.
"We have had a good start to the year, with prices trying to consolidate into a higher range between $1,080 and $1,100," ActivTrades chief analyst Carlo Alberto de Casa said.
"A close above $1,080 would certainly help gold's case, although long-term fundamentals, including the U.S. monetary policy and the oil price weakness represent a risk."
Bullion hit a two-month high of $1,112 last week as volatility in Chinese stocks raised concerns about the state of the global economy, leaving investors looking for a refuge in gold and other safe havens.
The metal was assisted by a weaker dollar, which fell 0.2 percent against a basket of leading currencies, making it cheaper for foreign currency holders.
The market will monitor U.S. retail sales data on Friday and comments from New York Federal Reserve President William Dudley.
The Fed raised rates in December and attention has shifted to how many increases will follow in 2016.
St. Louis Federal Reserve President James Bullard said a continued decline in inflation expectations may change his outlook for further Fed rate hikes, though so far he feels the United States continues on a healthy track.
Bullard's comments followed those by Chicago Fed President Charles Evans on Wednesday, when he said he was nervous about the potential effects of China's slowdown on the U.S. economy and about the possibility that inflation expectations may be slipping.
The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported a 2.4 tonne rise in its holdings on Wednesday, bringing its total inflow for the year to 11.7 tonnes.
Silver was up 0.3 percent at $13.85 an ounce, palladium fell 0.5 percent to $488.40 an ounce, heading for a second week of declines after a 12-percent slide last week and platinum fell 0.2 percent to $830.10.
(Additional reporting by Naveen Thukral in SINGAPORE; Editing by Adrian Croft)