Gold rose as the dollar weakened

Gold rose on Friday as the dollar weakened and US bond yields fell.

Investors evaluated inflation concerns and expectations regarding the interest rate policy of the US Federal Reserve (Fed).

Spot gold rose 0.9 percent to $4,169.32 per ounce, while US gold futures gained 0.9 percent to $4,194.40.

Gold hit its lowest level in two months on Wednesday. While the dollar's pause in its rise made gold more attractive for investors using other currencies, the US 10-year bond interest rate decreased for the second consecutive session.

Critical Metals Chief Executive Tony Sage said that the rise in oil prices and the risks of supply disruptions in the Middle East have increased inflation concerns, and possible new interest rate increases may put pressure on gold. Sage stated that central banks' ongoing gold purchases could limit losses.

Fed officials in St. Louis Fed President Alberto Musalem stated that interest rates may need to be increased again to return inflation to the 2 percent target, but did not express an opinion on what decision should be taken at this month's meeting.

According to CME FedWatch data, markets price the possibility of an interest rate hike as 18 percent in October and 82 percent in December. Gold, which is seen as a means of protection against inflation, remains under pressure in a high interest rate environment because it does not provide interest income.

US President Donald Trump stated that "productive" talks were held between Washington and Tehran to end the six-month war and said that the US would not attack Iran before the midterm elections in November.

In other precious metals, spot silver increased by 1.1 percent to $60, platinum increased by 2.2 percent to $1,670.15, and palladium increased by 2.1 percent to $1,146.98. However, all three metals were preparing to close the week with losses.