By Vijaykumar Vedala
BENGALURU (Reuters) - Gold prices inched up on Friday but held near six-week lows hit in the previous session, as the dollar firmed after upbeat U.S. economic data supported the Federal Reserve's resolve for steady interest rate hikes over the next year.
The dollar stood tall against its peers on Friday after data showed U.S. economic growth accelerated in the second quarter at its fastest pace in nearly four years. Another report showed durable goods rose 4.5 percent in August, rebounding from a revised 1.2 percent drop the month before.
Spot gold was up 0.2 percent to $1,184.91 as of 0405 GMT. On Thursday, the metal fell about 1 percent and touched its lowest since Aug. 17 at $1,181.61 an ounce. Spot gold is down about 1.2 percent for the week, on track for its fourth weekly decline in five.
U.S. gold futures were up 0.1 percent at $1,188.80 an ounce.
The short-term outlook is bearish for gold as the dollar may see some upside due to an ongoing trade war between China and the U.S. and the Federal Reserve interest rate hike outlook, according to Argonaut Securities analyst Helen Lau.
The U.S. Federal Reserve raised interest rates on Wednesday and said it planned four more increases by the end of 2019 and another in 2020.
"Gold has been trying to overcome the psychological level of $1,200 an ounce for the past few days. We didn't see that happening. And when it doesn't go up, it comes down," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
"After the prices came down we have seen some physical buying mainly from the businesses, which is offering some support at this time."
Gold is down more than 13 percent from an April high, largely because of the stronger dollar, which has been boosted by a vibrant U.S. economy and fears of a global trade war. Investors have bought the greenback instead of gold as a safe investment.
Meanwhile, President Donald Trump's accusation of Chinese meddling in the upcoming U.S. elections marks a new phase in an escalating pressure campaign against Beijing that Washington is pursuing on multiple fronts, senior U.S. officials said on Thursday.
"The trade war continues to favour the U.S. dollar and this will generally dampen gold's upside," said Nicholas Frappell, global general manager, ABC Bullion, Australia.
"Large speculative shorts may help cushion weakness as punters keep an eye on levels to close out and take money off the table," he said.
Among other metals, palladium touched a fresh eight-month high at $1,087.40 an ounce. Silver rose 0.6 percent to $14.29 an ounce and platinum declined 0.4 percent to $806.0.
(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Sunil Nair)
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