The precious yellow metal in Friday's session was dragged lower, nonetheless in the previous trading day it surged in price by more than 2% to hit an over 2-month high on global equity sell-off. The turmoil in the stock markets world over boosted the safe-haven appeal of gold.
In Thursday's session, spot gold climbed in price by as much as 2.5% to reach the highest levels since July 31 at $1,226.27. This surge was also the highest percentage gain in a single day since June 2016. At 1255 GMT, spot gold traded lower by 0.2% at $1,221.06 an ounce.
US gold futures also traded lower by 0.3% at $1,224.50 per ounce.
The global equity market rout was spurred by US President Donald Trump's criticism of Federal Reserve's interest policy stance, wherein he calls rate hikes by the US central bank to be a ridiculous" policy.
Other factors cited to have caused the biggest market carnage since the month of February are worries pertaining to economic impact of the US-China trade war, cautious stance just ahead of the earnings season and a rise in US bond yield in this week.
On Thursday, dollar weakened to a two-week low as traders reduced their positions in the US currency on account of equity losses on the Wall Street and lower US yields.
Meanwhile, in the domestic market, gold in 22K was priced higher by Rs. 320 per 10 gm at Rs. 31,010 whereas 24 K gold was retailing higher by Rs. 300 at Rs. 33000 per 10 gm.