Investing.com - Gold futures held onto the week's gains on Friday, buoyed by dovish language out of the Federal Reserve as well as concerns the U.S. may get dragged deeper into the Iraqi insurgency and risk slowing economic recovery.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,316.10 a troy ounce during U.S. trading, up 0.15%, up from a session low of $1,307.20 and off a high of $1,322.40.
The August contract settled up 3.25% at $1,314.10 on Thursday.
Futures were likely to find support at $1,258.00 a troy ounce, Tuesday's low, and resistance at $1,322.00, Thursday's high.
The Federal Reserve on Wednesday left benchmark interest rates unchanged at 0.00-0.25% and cut its monthly bond-buying program to $35 billion from $45 billion in widely expected move.
The dollar weakened and gold strengthened, however, after the U.S. central bank stopped short of offering a timetable as to when interest rates may rise. Gold and the dollar tend to trade inversely with one another.
Markets viewed the Fed's language as somewhat dovish.
"It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said in its Wednesday policy statement.
Geopolitical concerns kept gold prices elevated.
Iraqi security forces fought with Sunni militants for control of a 300,000 barrel-per-day refinery on Thursday, which pressured oil prices higher by stoking supply concerns, and gold prices followed suit on concerns higher oil and gasoline prices could slow the pace of U.S. recovery.
Still, many of the country's major oilfields remain far south of the fighting, which eased fears somewhat and allowed gold to give back some of its gains in profit taking.
U.S. President Barack Obama said on Thursday that he was sending up to 300 U.S. military advisers to Iraq and added he was prepared to take "targeted" military action later if deemed necessary.
Meanwhile, silver for July delivery was up 1.36% at $20.928 a troy ounce, while copper futures for July delivery were up 1.42% at $3.122 a pound.