LONDON: Gold eased on Friday as investors cashed in some of the previous day's 2 percent gains, though expectations that rock-bottom interest rates will persist served to keep prices above $1,225 an ounce.

Spot gold was $1,229.60 an ounce at 1440 GMT, down 0.2 percent, while US gold futures for April delivery gained 0.3 percent to $1,230.30.

Prices remain up nearly 16 percent so far this year, with turmoil in the wider financial markets fueling interest in the metal as a store of value while reducing the likelihood of further interest rate rises by the US Federal Reserve.

That is continuing to underpin gold as it consolidates below last week's one-year high of $1,260.60.

"Momentum is strong. Yesterday (Thursday) gold moved up even when the dollar was stronger, so for me that signals that it is mainly central bank-policy driven," ABN Amro analyst Georgette Boele said.

Gold tends to benefit from lower interest rates, which cut the opportunity cost of holding non-yielding assets.

The metal has been supported by inflows into gold-backed exchange-traded funds (ETFs), holdings of which have already risen this year by more than they fell in the whole of 2015.

Holdings of the world's top gold ETF, SPDR Gold Shares, rose a further 0.38 percent to 713.63 tonnes on Thursday.