hit the lowest since February 2010 at $1,077.00 an ounce but was up 0.5 percent at $1,096.29. U.S. gold futures for August delivery settled down 0.8 percent at $1,085.50 an ounce.

Gold turned higher after sliding more than 1 percent to its lowest since early 2010 on Friday, as the dollar fell from its highs and U.S. stocks extended losses, but the precious metal was on track to see the biggest weekly decline since March.

"We had an excessive slide in the equity markets. We saw the dollar give up some of its earlier gains," said David Meger, director of metals trading for High Ridge Futures in Chicago, explaining reasons for the late-day bounce.

Prices have been under pressure since tumbling more than 3 percent in Asian trading hours on Monday in their biggest one-day drop in nearly two years, a selloff accompanied by heavy trading volumes in New York and Shanghai.

Gold has been hurt this year by expectations that the Federal Reserve is on track to raise interest rates for the first time in nearly a decade, boosting the opportunity cost of holding non-yielding bullion while lifting the dollar.

The Fed will hold its next meeting July 28-29.

Read More2017 could prove to be gold's 'magic' year



"In the short term, investor sentiment is what actually moves prices," Capital Economics analyst Simona Gambarini said. "It's now likely that the Fed will hike rates this year, most likely in September ... (and) investors are already showing that in their positioning. They're becoming more bearish on gold."

The U.S. dollar pared gains against a basket of major currencies, while the euro fell on downbeat German and euro zone data. U.S. stocks extended losses late in the day.

As gold prices slumped this week, holdings of the world's biggest gold-backed exchange-traded fund, the SPDR Gold Trust , fell for a sixth day on Thursday to 684.6 tons, the lowest since September 2008. The fund is on track for its biggest weekly outflow since early May.

Physical demand in Asia remained lackluster amid modest premiums in top gold consumers India and China.

Gold is expected to struggle for the rest of this year, though platinum is expected to fight back, a Reuters poll showed on Friday.