Earlier dollar strength weighed on gold, making it more expensive for holders of other currencies, but the precious metal failed to garner any strength when the greenback turned slightly lower.  "It's a summer Friday-type atmosphere," said Bill O'Neill, co-founder of commodities investment firm LOGIC Advisors in New Jersey, referring to the lackluster session.  "It's a cautious day ahead of the Fed meeting. The nuances of next week's FOMC (Federal Open Market Committee) statement might be more hawkish than what we've seen in the past."  Read MoreGas and food surge sends May prices on a tear  The U.S. central bank will begin its two-day meeting on Tuesday, with a statement to be released on Wednesday afternoon.  Data on Friday showed U.S. producer prices in May recorded their biggest increase in more than 2-1/2 years, while U.S. consumer sentiment rose more than expected in June.  A firming economy could prompt the Fed to raise interest rates in September, which would boost the dollar further, in turn denting demand for non-interest-paying bullion.  Read MoreYen drops sharply, puzzling traders  "We expect a single rate hike in 2015, the million-dollar question is whether a rate hike will be able to push it below $1,150," ING Bank senior strategist Hamza Khan said.  The precious metal, typically seen as a hedge against political and financial risk, gave back early gains when it saw some support from the deteriorating Greek debt talks.  "The perception is that Europe can handle a Greek default better than it would have in 2010, when gold fell on the back of the unfolding of the Greek crisis and the fear of contagion to other periphery countries," Natixis analyst Bernard Dahdah said.  Weak physical demand and outflows from exchange-traded funds continue to undermine gold prices, traders said.
Gold inched lower on Friday as traders were cautious ahead of the U.S. Federal Reserve's policy-setting meeting next week.