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LONDON (Reuters) - Gold firmed on Friday as forecast-beating euro zone inflation boosted the euro against the dollar, while global stock markets retreated from Wednesday's record highs as concerns about global trade subdued appetite for cyclical assets.
The metal remains on track for its biggest weekly drop in seven, however, as appetite for nominally higher-risk assets sharpened early in the week at gold's expense.
Spot gold XAU= was up 0.2 percent at $1,266.11 an ounce at 0945 GMT, while U.S. gold futures GCv1 for June delivery were up $1.90 at $1,267.80. Spot gold was down 1.4 percent from last Friday's level, its biggest weekly loss since early March.
"Most of the correction should be done by now," Commerzbank analyst Daniel Briesemann said. "We see good support at this level. There are a lot of uncertainties remaining.
"The high-risk appetite at the beginning of the week seems to have abated, at least for now. This has definitely helped support the gold price, and the dollar is supportive as well."
The euro hit session highs versus the the U.S. currency while euro zone bond yields and stocks rose after data showing euro zone inflation beat expectations in April.
Gold suffered earlier this week after a strong showing in the first round of the French elections from Emmanuel Macron, the centrist candidate largely favoured by financial markets. That tempered some fears that a candidate less friendly to the European Union could win through.
A three-day rally in stock markets stalled after a largely expected U.S. tax cut plan, however. U.S. President Donald Trump's announcement on Wednesday received a lukewarm reception as some details were largely anticipated by investors.
"Gold prices remained stuck in a $1,260-$1,270 range as traders tried to take stock of the flurry of policy measures from U.S. President Trump," ANZ said in a note.
"Geopolitical concerns have also eased, with election polls suggesting Emmanuel Macron's lead has increased."
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares (GLD), fell 0.1 percent to 853.36 tonnes on Thursday. Holdings are down by more than 6 tonnes since Tuesday.
Among other precious metals, silver XAG= was up 0.8 percent at $17.36 an ounce, while platinum XPT= advanced 0.5 percent to $944.25.
Palladium XPD= was up 0.6 percent at $819.97, having touched a two-year high of $824.50 an ounce. It was the only weekly gainer among the precious metals, set to finish the week with a 3.8 percent rise.
Additional reporting by Swati Verma and Nallur Sethuraman in Bengaluru; Editing by David Goodman