Gold advanced more than 1% on Friday on a combination of cooling oil prices and a softer U.S. dollar, with markets weighing the likelihood of further Federal Reserve interest-rate hikes.
Spot gold rose 1.4% to $4,189.99 U.S., heading for a weekly gain. U.S. gold futures for December delivery also added 1.4%, trading at $4,215.30 per ounce.
Oil prices fell on Friday as worries over Middle East supply disruptions subsided after U.S. President Donald Trump said the country would not attack Iran before the U,S. midterm elections next month, amid talks to end a war that has disrupted global energy markets.
A softer dollar makes greenback-denominated bullion less expensive for holders of other currencies.
However, one expert remarked gold continues to face a challenging environment, leaving it vulnerable to renewed declines.
Gold is traditionally seen as a hedge against inflation, but higher interest rates dim the ?appeal of the non-yielding asset.
Traders are pricing in a 19% chance of a rate hike in October and an 84% probability of at least one 25-basis-point increase by December.
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