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Gold fell slightly on Friday as the dollar strengthened, but was on track for its first weekly gain in four weeks on steady physical buying from China and exchange-traded funds.

"Gold is well supported at $1,250 and everyone is waiting for the elections and the prices are just moving according to the dollar," said Yuichi Ikemizu, head of Commodity trading at Standard Bank in Tokyo. An interest rate hike by the U.S. Federal Reserve has been already factored in the prices, Ikemizu said. "Even if they raise rates gold will not go down steeply."

"ETFs adding new positions show the investment demand for gold and this could probably prevent gold going below $1,250," Standard Bank's Ikemizu said.

"We continue to see exchange-traded fund (ETF) inflows support the metal (gold), however dollar strength is likely to weigh upon moves higher over the short term amid euro and pound weakness," MKS PAMP Group trader Sam Laughlin said.

Reference: Reuters