Gold firmed on Friday after U.S. Federal Reserve Chair Janet Yellen made no mention of monetary policy in her much-anticipated speech, while investors awaited clues from European Central Bank President Mario Draghi.
U.S. short-term interest rate futures rose slightly, reflecting reduced expectations that the Fed will raise interest rates further this year, after Yellen skipped mention of it when speaking in Jackson Hole, Wyoming.
"That relieved the market of a little bit of concern about that," said Bill O'Neill, partner with Logic Advisors in Saddle River, New Jersey, adding this was positive for gold prices and pressured the dollar. "She clearly came off dovish, saying maybe we need a few changes in bank regulation, but they should be modest."
Gold is highly sensitive to rising interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the greenback. Draghi is scheduled to speak at the Jackson Hole central bankers meeting at 1900 GMT. Monday is a bank holiday in the United Kingdom.
Spot gold was up 0.5 percent at $1,292.14 an ounce was on track to close the week up 0.6 percent.
U.S. gold futures settled up 0.5 percent at $1,297.90.