Spot prices were heading for a 2.5 percent weekly gain, snapping a three-week losing streak, mostly due to global equities slumping at the start of the week on worries over developments in Greece that could see it quitting the euro.
The dollar was down 0.4 percent against a basket of currencies and European stocks closed negative.
Despite recent improvements in the job market, investors remained focused on the fact that the minutes of the Federal Reserve's latest policy meeting released on Wednesday indicated the central bank would be patient in raising rates due to low inflation expectations.
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Boston Fed President Eric Rosengren, speaking on Thursday, highlighted the Fed's cautious stance, saying the central bank can likely be patient not only on the timing of the first interest rate hike but also on the series of subsequent increases.
Gold, which has no yield, tends to suffer in an environment of rising interest rates.
"Gold is supported in this tight $1,200/$1,230 range because people are still a bit worried that with low inflationary pressures the Fed will not hike interest rates so soon," ABN Amro analyst Georgette Boele said.
In the physical markets, demand from China has been strong in recent weeks in the build-up to the Lunar New Year holiday in February, when gold is bought for gift-giving.
Premiums on the Shanghai Gold Exchange were hovering between $5 and $6 on Friday over the global benchmark, indicating strong buying interest.