Gold rose on Friday as the dollar's rally stalled ahead of US inflation data, but it was still on course for its biggest weekly decline in four weeks.

Spot gold rose 0.5 per cent to $1,211.98 an ounce by 1001 GMT. It was down 0.8 per cent for the week, however, heading for its biggest fall since the week ended April 24 and 1.5 per cent below a three-month high of $1,232.20 hit on May 14.

Volumes were expected to stay thin on Friday ahead of public holidays in Britain and the United States on Monday.

"We get inflation data from the US economy and comments from (US Federal Reserve Chair Janet) Yellen later today, which will impact short-term price direction," Danske Bank senior analyst Jens Pedersen said.

"There is consensus among analysts that the rate hike is now being pushed back to September, but the risk is the Fed will postpone the rate hike towards the end of the year or even the beginning of 2016, which could be supportive."

The dollar fell 0.2 per cent versus a basket of leading currencies after weaker than expected US manufacturing data and a rise in weekly claims for state unemployment benefits.

Gold prices were getting some support from views that the Federal Reserve was now unlikely to raise US interest rates at its next policy meet in June following the data.

Traders will be eyeing US April consumer prices data, as well as a speech from Federal Reserve Chair Janet Yellen later in the day, for clues on the strength of the economy and the timing of the next US interest rate increase.

"We still would like to see a bit more conviction for gold before we advocate taking a position," said INTL FCStone analyst Edward Meir, adding there was no clear trend on price direction.

Higher US interest rates would increase the opportunity cost of holding non-yielding bullion.

Investor sentiment towards gold has turned bearish as prices have fallen from three-month highs reached earlier this week.

"Gold continues to be drawn towards the $1,200 pivot point. The metal has failed to move more than 3 percent on either side of $1,200 since mid-March," MKS Group said in a note.

Gold buying was slow this week in Asia, with the Chinese hooked on surging equities. Demand in India stayed weak and was unlikely to pick up as the wedding season cools.

Silver was up 0.6 per cent at $17.23 an ounce. Platinum rose 0.2 per cent to $1,154.75 an ounce and palladium fell 0.7 per cent to $772.50 an ounce. - Reuters