Gold has been under pressure in recent days from the strong dollar, which makes dollar-priced gold more expensive for purchases in other currencies. "Once the yen strengthened, we saw gold pick up and the same with the other metals," he said. The dollar/yen rate was holding at about 141.50 yen, down from 142.80 earlier on Friday.

Traders said the outlook for gold depends on the currency developments. "If the yen falls to 150 or 160, we will see some aggressive selling of gold. But if it stays around this level, gold will move between US$288 and US$291 and then look at US$295 to US$297.50," a trader said. He said themarkets are looking for some concrete action to revive Japanese economy and allow the yen to recover, with bank restructuring or across-the- board tax cuts among possible solutions.