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Gold held a weekly decline as Deutsche Bank AG works to mend its finances, eroding demand for haven assets, and as investors weigh the British Prime Minister’s comments on Brexit.

Concerns over Deutsche Bank’s financial health are ebbing, helping to lift Asian equities. Agence France-Presse reported on Friday that the German lender is nearing a pact to pay the U.S. Department of Justice $5.4 billion, less than half the initial amount requested, to settle a probe related to bad mortgages. The bank is also poised to reach an agreement with labor representatives to cut jobs, people with knowledge of the matter told Bloomberg News.

Britain’s Theresa May said she’ll begin the process of withdrawal from the European Union in the first quarter of 2017, which hurt the pound. U.S. payrolls data due later this week will give further clues on the U.S. Federal Reserve’s next policy move. Odds on a rate hike by December are near 60 percent, according to Fed funds futures.

“The Brexit will once again be a focal point after May set March 2017 as a deadline for triggering of Article 50,” Bryan Lum, a Singapore-based strategist with Phillip Futures Pte, said in an e-mail. “Markets will continue to assess the state of the U.S. economy as well, given the release of nonfarm payrolls this Friday. With markets biased toward a December rate hike, a weak number here could dampen expectations and see prices rally in response.”

"With the news that Deutsche Bank is going to be settling at around $5 billion dollars, it is going to be taken fairly positive by the market as we had seen a lot of selling in the equities on Friday," said Jeffrey Halley, senior market analyst at OANDA.

Gold is sidelined at the moment as "everything seems to have calmed down substantially including Deutsche Bank and OPEC production cuts," Halley said. OANDA sees gold trading sideways between $1,315 and $1,325 an ounce for now, he said.

The absence of top consumer China, where markets are shut from Oct. 1-9 for the Chinese National Day holidays, is expected to keep trading volumes low.

"We see no major investor enthusiasm for gold and prices may have to ease to test the $1,300-$1,310 level before support materializes," said HSBC analyst James Steel in a note. "Gold's best near-term chance of a rally would more likely come from an oil surge or a deterioration of the financial situation in Europe," Steel said.

Reference: Bloomberg, Reuters