By Devika Krishna Kumar and Jan Harvey
NEW YORK/LONDON (Reuters) - Gold prices eased from five-month highs on Thursday as the dollar rebounded from a slide triggered by comments from U.S. President Donald Trump that the greenback was too strong and that he would prefer the Federal Reserve keep interest rates low.
The metal was up about 2.6 percent on the week, on track for its biggest weekly gain since June, as concerns over tensions in North Korea and the Middle East kept stock markets under pressure.
Spot gold > was up 0.06 percent at $1,286.84 an ounce by 2:26 p.m. EDT (1826 GMT), having earlier hit its strongest since early November at $1,288.64 an ounce. U.S. gold futures
"We think that gold prices could fall back in the near term if tensions cool, as seems likely, and that they will continue to fall as the Fed tightens policy later this year," Capital Economics said in a note.
Trading volumes in wider markets have been light ahead of the long Easter holiday weekend.
The dollar index <=USD>, which tracks the greenback against a basket of six trade-weighted peers, was up 0.4 percent, after a 0.6 percent decline on Wednesday marked its biggest one-day fall in three weeks.
Fears of a new weapons test by North Korea as a U.S. carrier group sailed towards the region, as well as worries about the upcoming French presidential election, still kept investors on edge.
Russian President Vladimir Putin said on Wednesday trust had eroded between the United States and Russia under Trump, as Moscow delivered an unusually hostile reception to U.S. Secretary of State Rex Tillerson in a face-off over Syria.
"We remain constructive on gold (given) elevated political tensions in both Korea and Syria, coupled with a lower drift evident in U.S. equity markets," INTL FCStone said in a note.
From a technical perspective, gold faces strong near-term resistance at $1,291 an ounce, the location of a trendline declining from its 2011 record high of $1,920.30 an ounce, analysts said.
One of the major physical gold markets, India's imports of the precious metal soared to $418 billion in March, data showed.
"The recent rise in imports is the result of the rise in demand expected during the wedding season, which has just begun, and for the Hindu festival of Akshaya Tritiya at the end of the month," Commerzbank said in a note.
"In addition, there was probably something of a demand backlog following a period in which Indian traders held back with buying gold when the government suddenly launched its cash reform, having used first of all their stocks."
Among other precious metals, silver > was up 0.3 percent at $18.52, off a five-month high of $18.599 earlier in the session. Platinum > was 0.05 percent lower at $968, while palladium was down 0.3 percent to $794.50.
(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by David Holmes and Meredith Mazzilli)
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