India, Aug. 15 -- Gold ticked higher on Friday as the dollar failed to sustain its recovery from the previous session.

Spot gold edged up by 0.3 percent to $3,3343.88 per ounce in European trade, but was poised for a weekly decline as hotter-than-expected producer price inflation data prompted traders to dial back expectations for a Federal Reserve rate cut next month. U.S. gold futures were up 0.2 percent at $3,390.40.

The dollar index was a tad softer as disappointing U.S. and Chinese economic data raised worries about the global economic outlook.

Producer price inflation data released overnight partly offset optimism about a September interest rate cut generated by the consumer price inflation data released earlier this week.

While b...