The dollar index, which measures the greenback against a basket of currencies, was up 0.2 percent at 89.883. It reached a 10-day high of 90.235 on Thursday after hitting a three-year low of 88.253 late last week and was on track for a gain of almost 1 percent this week.
"People do know that interest rates will be raised, most likely in March, and have priced that in," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
"People didn't go for the down, they covered their short and start to buy gold back again."
Spot gold is expected to rise to $1,354 per ounce as it has stabilised around a support at $1,326, according to Reuters technical analyst Wang Tao.
Meanwhile, Asian shares rebounded on Friday as comments from a Federal Reserve official eased worries that the central bank might raise rates more aggressively this year.
The Fed started tightening its ultra-loose policy at the end of 2015 after keeping rates on hold for almost a decade. It raised interest rates three times in 2017 and is likely to tighten again in March.
Higher interest rates make non-yielding gold less attractive.
Among other precious metals, silver fell 0.2 percent to $16.59 an ounce, palladium rose 0.1 percent to $1,038.97 and platinum climbed 0.3 percent to $996.90.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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