Spot gold was up 0.2% at $1,829.61 per ounce by 0626 GMT. U.S. gold futures rose 0.2% at $1,827.40.
The metal traded flat for the week.
The dollar index was down 0.1% against its rivals, making gold cheaper for other currency holders. [USD/]
"Inflation is not necessarily bad for gold, however, it's bad if the central banks start to act on it, and the market is getting a little bit jittery thinking that this could bring forward the U.S. Federal Reserve's taper a little bit," said Stephen Innes, managing partner at SPI Asset Management.
Key U.S. economic readings this week showed a bigger-than-expected rise in consumer prices and weekly jobless claims dropping to a 14-month low, intensifying concerns over rising inflation and prospects of a rise in interest rates.
Higher interest rates increase the opportunity cost of holding bullion.
"Right now we haven't had any inclination that the Fed is about to move anytime soon, I think gold still remains relatively supported," Innes said, adding that strong economic data still remains a key concern.
The U.S. central bank has pledged to keep interest rates low until the economy reaches full employment, and inflation is on track to "moderately" exceed the 2% level for some time.
"We'll need some more clarity in terms of how persistent inflation is. If it turns out to be transitory, yields will remain lower," said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
Investors now await U.S. retail sales data due later in the day.
Elsewhere, palladium gained 1.8% to $2,914.28 per ounce. Silver rose 0.1% to $27.09, while platinum was up 0.9% at $1,216.69.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)
By Shreyansi Singh
