Earlier in the session, the bullion fell as much as 1.2 per cent to $1,159.96, its lowest since January 2017.
The Australian dollar strengthened against the United States dollar on Thursday as the crisis engulfing Turkey's lira calmed for a moment, although sentiment remained negative.
"Turkey will emerge stronger from these [currency] fluctuations", Albayrak was quoted by state-run TRT television as saying. Ratings agency S&P Global Ratings is also scheduled to release a review of Turkey's sovereign credit rating after the market closes on Friday.
National Security Adviser John Bolton met at the White House on Monday with Turkish ambassador Serdar Kilic, but the discussion reportedly did not result in any substantive progress.
Central bank data showed foreign currency deposits held by local investors rose to US$159.9 billion in the week to Aug 10, from US$158.6 billion a week earlier.
Investors are concerned that Turkey has amassed high levels of foreign debt to fuel growth in recent years.
The currency lost almost 40 percent against the dollar this year, driven by worries over President Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation. Erdogan has tightened his grip since consolidating power after general elections this year.
Rain fury devastates Kerala, Cochin International Aiport completely submerged
In fact, due to flooding and landslips, several trains at the Thiruvananthapuram-Nagarcoil route have been cancelled. Airlines including IndiGo, Air India and SpiceJet have announced suspension of their operations to Kochi .
The White House has said that Turkey's tariff hikes on USA products in retaliation for sanctions against Ankara were "regrettable" and again called for the immediate release of American pastor Andrew Brunson.
Turkey retaliated with some $533 million of tariffs on some US imports - including cars, tobacco and alcoholic drinks - and said it would boycott USA electronic goods, singling out iPhones.
On Aug. 15, a Turkish court in the Aegean province of Izmir, where Brunson is on trial, rejected the pastor's appeal to be released from house arrest.
"Every product that we buy in foreign currency from outside, we will produce them here and sell overseas", Erdogan said in a speech, according to The New York Times.
"Our relations with Turkey are not good at this time!" She wouldn't be drawn on whether the Trump administration would respond. They are now holding our wonderful Christian Pastor, who I must now ask to represent our Country as a great patriot hostage.
They also agreed on a meeting between the two countries' finance ministers "as soon as possible".
In a sign that Turkey may hope to make common cause with other affected countries, Mr Erdogan and French President Emmanuel Macron spoke by phone on Thursday, discussing developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said. Erdogan held a similar conversation with Germany's Angela Merkel on Wednesday.