Investing.com - Gold prices edged higher on Friday, re-approaching a recent two-month peak as caution surrounding Donald Trump's future policies continued to boost demand for the safe-haven precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.40% at $1,206.15, not far from Wednesday's two-month high of $1,214.70.
The February contract ended Thursday's session 0.87% lower at $1,201.50 an ounce.
Futures were likely to find support at $1,195.80, Thursday's low and resistance at $1,214.70.
Gold prices initially dropped due to a stronger U.S. dollar late Thursday, after Fed Chair Janet Yellen said the central bank should continue to raise interest rates, but slowly.
Speaking at a conference in San Francisco, Yellen said that "allowing the economy to run markedly and persistently hot' would be risky and unwise," before adding: "I consider it prudent to adjust the stance of monetary policy gradually over time."
The greenback also strengthened following the release of strong U.S. jobless claims and housing starts data, as well as an upbeat Philly Fed manufacturing activity report.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
But sentiment on the U.S. dollar became more vulnerable on Friday morning, ahead of Donald Trump's inauguration ceremony amid sustained uncertainty over the new U.S. administration's fiscal and economic policies.
Demand for gold was also boosted by data on Friday showing that China's gross domestic product rose 6.8% in the fourth quarter of 2016, in line with expectations.
Year-on-year, China's economy grew at a rate of 6.8%, slightly above expectations for a growth rate of 6.7%.
China is the world's biggest gold consumer.
Elsewhere in metals trading, silver futures for March delivery were little changed, down only 0.02% at $16.998 a troy ounce, while copper futures for March delivery dropped 0.59% to $2.595 a pound.