Gold had dipped to a four-month low earlier this week as concerns mounted over higher US interest rates which could dent the demand for non-interest bearing bullion.
The Fed, however, sounded a cautious note on the health of the economic recovery after its two-day policy meet this week, and slashed its median estimate for the federal funds rate and expressed concern over the strength in the dollar.
"Gold (is) still getting traction from dovishly perceived FOMC statement, short-covering and fresh purchases,'' said HSBC analyst James Steel, referring to the Federal Open Market Committee.
Gold's rise on Thursday despite a higher dollar and weaker oil prices could indicate the underlying strength, he said.
Typically, a stronger dollar dents the demand for bullion as a safe-haven and makes it more expensive for the holders of other currencies. Weaker oil could also reduce gold's appeal as a hedge against inflation.
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Post-Fed, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw its first inflows since February 20, also boosting sentiment.
In the physical markets, Chinese buying was steady, with premiums on the Shanghai Gold Exchange staying at a robust $6 to $7 an ounce on Friday. Sustained physical buying could further support prices.
In other industry news, six institutions will start setting gold prices electronically on Friday, as Intercontinental Exchange completes a sweeping change to London's bullion benchmarks and dispenses with the century-old gold "fix'.'
Some of the lowest valuations in decades and rising pressure on Africa's gold producers to restructure or perish are likely to spur a wave of acquisitions in a sector attracting a growing number of potential buyers.
Among other precious metals, silver and platinum were headed for weekly gains after a two-week slide. Platinum continued to trade at about $50 discount to gold, a factor that is likely to stoke physical demand according to the Perth Mint, which is ramping up the production of its platinum coins.