Gold rose on Friday on bargain hunting, though the market posted its biggest weekly drop since November following the Federal Reserve's latest indication that an interest rate hike could come in early 2015.
Palladium rose about 3 percent to its highest level since August 2011, outperforming other precious metals as a miners' strike in South Africa continued and concerns grew that the standoff between major producer Russia and the West over Ukraine could escalate.
Gold's gains on Friday, however, were limited as the market was still reeling from a two-percent drop on Wednesday, when Fed Chair Janet Yellen said the central bank will probably end its massive bond-buying program this fall, and could start raising interest rates around six months later.
"If the Fed is going to raise rates quicker than people had expected, that's definitely bearish for gold," said Bill O'Neill, partner of commodities investment firm LOGIC Advisors.
Spot gold was up 0.5 percent to $1,334.76 an ounce by 2:32 p.m. EST (1832 GMT), after falling to $1,320.24 on Thursday, its weakest since end-February.
U.S. COMEX gold futures for April delivery settled up $5.50 at $1,336 an ounce, with trading volume about 10 percent above its 30-day average, preliminary Reuters data showed.
On Monday, bullion briefly touched a six-month high of $1,391.76 on tensions in Ukraine and concerns about growth in China before the focus shifted towards the U.S. monetary stance.
Since then, bullion has come under pressure after Russia's President Vladimir Putin signed laws completing its annexation of Crimea, but said it had no plans to invade other parts of Ukraine. For the week, gold fell nearly 3.5 percent.
"Once again the market has proven it cannot maintain strength based on political tensions," O'Neill said.
GOLDEN CROSS, PALLADIUM RALLIES
A "golden cross" on the spot bullion chart following a three-month rally suggests prices could climb further this year even after the Federal Reserve is set to keep trimming its bond-buying stimulus, analysts said.
Palladium rose as much as 4.5 percent to $797.00 an ounce, its highest since August 2011. It was last trading up 3 percent at $785.59.
The metal has also benefited from the launch this week of two palladium-backed exchange-traded funds in South Africa. A similarly structured platinum fund launched in Johannesburg last year saw hefty inflows of palladium's sister metal.
In other precious metals, silver rose 0.3 percent to $20.29 an ounce and platinum gained 0.1 percent to $1,427.70 an ounce.
(By Frank Tang and Clara Denina; Additional reporting by Lewa Pardomuan in Singapore; editing by Jason Neely and Meredith Mazzilli)