Gold edged lower on Friday, after a four-day winning streak that sent prices to a three-month top in the previous session, while progress in solving Greece's debt crisis and a recent weakness in the dollar has put bullion on track for a rise this week.
A strong euro, which hovered near 2-1/2-month highs after upbeat data from Germany, and a softer dollar, which fell around half a percent this week, checked the drop in gold prices.
A weak dollar makes commodities priced in the greenback cheaper for holders of other currencies.
"There is quite some pressure at the $1,800 level after prices rose quite rapidly over the past few days, and we may see some liquidation ahead," said a Hong Kong-based trader.
Gold was, however, headed for a weekly rise of 3%, its biggest one-week gain in nearly a month, supported by a key breakthrough on the chart, among other factors.
"Technicals, along with the weakness in the dollar, lead to gold buying," said Peter Tse, director at ScotiaMocatta in Hong Kong, adding that gold could test higher levels as it had broken a key resistance around $1,760 on Wednesday.
But he cautioned some profit-taking selling could emerge ahead of the Group of 20 finance ministers meeting on weekend.
"Beware that any correction could be sharp and deep, even though the trend is still looking fairly good for the time being," he added.
The euro zone debt crisis is expected to dominate the discussions at the G20 meeting, before a European Union summit on March 1-2.
Technical analysis suggested that spot gold could rise towards $1,797 an ounce during the day, said Reuters market analyst Wang Tao.
Investors will also be watching a second three-year long-term refinancing operation (LTRO) allotment by the European Central Bank on Feb 29, which is expected to inject nearly half a trillion euros to banks.
Hopes of more monetary easing by central banks have helped gold rally nearly 14% this year, as injection of a large amount of cheap cash raises the inflation outlook, which burnishes gold's appeal as an inflation hedge.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings gained 1.209 tonnes to 1,282.796 tonnes by February 23, the highest in more than two months.
Spot silver was little changed at $35.31 after a hefty 3% rise in the previous session pushed prices to $35.59, a level unseen in nearly four months.
Spot platinum edged down 0.3% to $1,713.24, off a five-month high of $1,731.50 hit in the previous session. The metal is headed for a weekly rise of about 5%.
Traders and analysts cautioned that platinum's recent rally might be losing steam soon.
"I wouldn't read too much into it, as the size and volume in trading of that metal has been fairly light. We have to wait a few days to confirm that the rally can be sustainable," said Tse of ScotiaMocatta.
