London, July 11: The precious metals took on a slightly firm tone on Friday as the markets consolidated and corrected higher after recent rapid declines, traders said.

Gold, having moved away from 12-year lows of $313.60 earlier in the week, was fixed at $320.60 an ounce, compared to $319.80 on Thursday and a London close of $319.40-$319.90.

"Gold is very oversold on the technical charts and, having bounced off support around $315 this week, may even see a short covering rally in coming days," a dealer said.

Gold prices tumbled last Thursday when the Australian central bank announced it had sold 167 tonnes of its reserves.

Concerns of more institutional selling to come continue to weigh heavily on the market.

"The attitude of the central banks, especially in Europe, sends threatening vibes out. Sentiment is very bearish and it remains likely gold will see a strong test of $300 and lower sooner or later," the dealer said.

In gold-related news, the Belgian parliament approved a plan to raise the amount of central bank gold that can be sold in the form of commemorative coins.

Coin sales would be limited to a maximum 26 tonnes a year and have to be approved by the planned European central bank.

Silver has been closely following gold and was indicated up three cents at $4.36-$4.38.

The platinum group metals (PGMs) also started European trading hours firmer after coming off Thursday's lows amid yen-related buying and short covering in Asia.

Platinum was indicated $9.00 higher at $405.00-$409.00, while palladium was up $6.00 at $168.00-$172.00.

Palladium crumbled to two-month lows on Thursday on news that long-delayed Russian PGM exports to Japan had resumed. Platinum prices also eased.