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Gold prices rose slightly on Friday as the dollar eased on fears of an imminent trade war following U.S. President Donald Trump's decision to impose steep tariffs on imported steel and aluminium.


Spot gold had risen by 0.1 percent to $1,316.84 an ounce by 0412 GMT, but was on track for a second straight weekly drop after having declined 0.9 percent so far.


Prices fell to the lowest since Jan. 2, at $1,302.61, in the previous session under pressure from expectations of more interest rate hikes in the United States than expected this year.


U.S. gold futures were up almost 1 percent at $1,317.7 per ounce on Friday.


"The U.S. imposed trade tariffs and those that come back our way in the form of retaliation should be net negative for the dollar and could conceivably provide gold with some support," INTL FCStone analyst Edward Meir said in a note.


The dollar index , which measures the greenback against a basket of major currencies, was down 0.2 percent at 90.171. It shed 0.4 percent overnight, pulling back from a six-week high of 90.932 touched early on Thursday, after Trump's decision.


The Trump administration said the tariffs would protect U.S. industry, but the dollar and Wall Street shares slumped as the plan sparked fears of a trade war and worries about its potentially negative impact on the world's largest economy.


Meanwhile, Federal Reserve Chairman Jerome Powell said on Thursday there was no evidence the U.S. economy is overheating, and labour markets may still have room to improve as the central bank sticks with a gradual pace of rate hikes.


The precious metals market would continue looking out for interest rates along with the dollar's movement, said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.


A stronger dollar and higher interest rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies.


"Weaker equity markets could also provide a shot in the arm for the precious metal," said Meir.


Stock markets in Asia on Friday extended a Wall Street rout as the risk of global trade war spooked investors.


Spot gold is expected to bounce more into a range of $1,325-$1,332 per ounce, following its failure to break a support at $1,303, according to Reuters technical analyst Wang Tao.


Holdings of SPDR Gold Trust rose 0.35 percent to 833.98 tonnes on Thursday from 831.03 tonnes on Wednesday.


In other precious metals, silver was down 0.3 percent at $16.41 an ounce after touching its lowest in over two months at $16.16 in the previous session.


Platinum was 0.1 percent lower at $965.40 per ounce after falling to its lowest since Jan. 4 at $950.50 on Thursday.


Palladium rose 0.2 percent to $991 after recording its biggest one-day percentage fall of 5.1 percent since Jan. 25, 2017, in the previous session.