Spot gold rose 0.7% to $1,719.65 per ounce as of 0407 GMT. Prices were up 0.5% for the week, after three straight weekly declines.
U.S. gold futures were up 0.6% to $1,730.90.
The dollar index was down 0.7%, after touching one-week low, making the greenback-priced bullion less expensive for holders of other currencies. [USD/]
"At present levels, gold appears in the short term to have bottomed out," said Michael Langford, director at corporate advisory firm AirGuide.
"Ongoing jobless claims and employment numbers will materially influence the central bank's views of the strength of the underlying economy."
Data on Thursday showed claims for unemployment benefits fell last week in the United States, highlighting the robustness of the labor market and bolstered expectations of Fed's aggressive rate hikes.
The Fed is "strongly committed" to fighting inflation and remains hopeful that can be done without the "very high social costs" involved in prior campaigns to control surging prices, Fed Chair Jerome Powell said.
The U.S. central bank is expected to raise the its funds rate by another 75 basis points on Sept. 21.
"Gold has been essentially oscillating between about $1,685-$1,680 and $1,725-$1,720 digestive range," said DailyFX currency strategist Ilya Spivak.
Higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.
The European Central Bank raised its key rates by an unprecedented 75 basis points on Thursday.
Spot silver gained 1.4% to $18.8206 per ounce and was up 4.5% for the week.
Platinum rose 0.4% to $882.62 and was headed for its biggest weekly gain since June.
Palladium fell 1.5% to $2,106.41, but was set for its first weekly rise in four.
(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi Aich)
By Eileen Soreng
