By Eric Onstad
LONDON (Reuters) - Gold edged higher on Friday, but was likely to revisit five-week lows after the prospect for a Korean denuclearisation deal eroded bullion's safe haven appeal.
The leaders of South and North Korea embraced after pledging on Friday to work for the "complete denuclearisation of the Korean peninsula".
Spot gold was up 0.1 percent at $1,318 per ounce at 1015 GMT, not far from a low of $1,315.06 an ounce hit in the previous session, its weakest since March 21.
Spot gold was on track to fall more than 1 percent this week, its second consecutive weekly decline and the biggest weekly drop in four.
U.S. gold futures also added 0.1 percent to $1,318.90 per ounce.
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"We have the pictures from the meeting of the two Korean leaders today, showing geopolitical hotspots have calmed down massively, so there's scant argument to be bullish on gold at the moment," said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt.
Adding to the pressure on gold, the dollar was firmer, bond yields are higher and spot gold slipped below its 100-day moving average, he said.
"That's a very negative sign for technical oriented investors ... I expect gold to briefly dip below $1,300, but physical buying will kick to support the price."
"The strength of the U.S. dollar - combined with the weakness of the eurozone currency, after (ECB chief) Mario Draghi's speech - is pushing down the yellow metal," said Activtrades chief analyst Carlo Alberto De Casa.
The dollar hit a fresh 3-1/2-month high against a basket of currencies on higher U.S. yields, while the euro was hampered by a dovish tone from the European Central Bank.
On Wednesday, the benchmark 10-year Treasury yield reached its highest since January 2014, at 3.035 percent.
A rise in U.S. bond yields pressures gold by reducing the attractiveness of non-interest paying bullion, which is priced in dollars.
"All eyes will be on the U.S. GDP number out on Friday and this should give markets more direction heading into next week," INTL FCStone analyst Edward Meir said.
Strong GDP numbers may prompt faster interest rate rises in the United States and gold as a non-interest-paying asset could see demand taking a hit from higher rates.
Silver was up 0.3 percent to $16.52 per ounce. For the week, the metal is down over 3 percent so far, its biggest weekly decline since the week ending Feb. 2.
Platinum added 0.4 percent to $909.20 per ounce, after touching $900.50, the weakest since Dec. 18.
Palladium eased 0.2 percent to $982.20 an ounce and has fallen more than 4 percent so far this week, after two weeks of gains.
(Additional reporting by Swati Verma in Bengaluru. Editing by Jane Merriman)
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