Gold prices were muted on Friday, stuck in a tight trading range as the dollar extended gains from the previous session when strong U.S. inflation data and trade war concerns boosted demand for the greenback.

Spot gold was down 0.1 percent at $1,245.61 an ounce, as of 0347 GMT. For the week, the metal was down about 0.7 percent.

U.S. gold futures for August delivery were little changed at $1,246.10 an ounce.

The dollar climbed to a six-month peak versus the yen on Friday and held firm near a 10-day high against a basket of currencies boosted by expectations U.S. inflation will pick up, although concerns about an escalation in U.S.-China trade tensions limited the greenback's gains.

U.S. consumer price data on Thursday showed a steady buildup of inflation that could keep the Federal Reserve on a path of gradual interest rate increases.

A stronger dollar and higher U.S. rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies.

Elsewhere, the European Central Bank will keep rates at a record low for as long as needed to raise inflation, minutes of the bank's latest meeting showed.

Meanwhile, Asian shares rose on Friday following gains on Wall Street overnight, as concerns over an escalating U.S. trade war with China took a breather.

The United States and China could reopen talks on trade but only if Beijing is willing to make significant changes, U.S. Treasury Secretary Steven Mnuchin said on Thursday.

"The trade war issue is still creating a lot of uncertainty. If the situation continues and we're not seeing any real movements in gold prices because of it, we might see prices actually move lower," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.

"While other geopolitical issues may have dissipated a little, I think Brexit is probably one issue that is resurfacing and could lend support to gold," Cameron said.

U.S. President Donald Trump said a free trade deal with Britain might be impossible if London went ahead with Prime Minister Theresa May's proposals for post-Brexit ties with the European Union, in damaging remarks that could widen domestic criticism of her plans.

During times of uncertainty gold prices can receive a boost as the metal is widely considered a safe-haven asset but bullion has failed to benefit from recent trade disputes.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.48 percent to 795.19 tonnes on Thursday.

In other precious metals, silver rose 0.2 percent to $15.93 an ounce, after slipping to the lowest in seven months in the previous session.

Platinum slipped 0.2 percent to $837 an ounce, while palladium lost 0.3 percent to $946.50.

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