(Updates prices in the second and final paragraphs.)
Gold was mostly steady midafternoon Friday, sticking above the $4,000 mark even as the dollar nudged higher.
Gold for August delivery was last seen up $18.20, or 0.5%, to $4,068.40 per ounce.
The price of the metal has found support at the $4,000 mark despite the inflation worries sparked by the high oil prices that followed the launch of the war on Iran. The price of the metal is down 22% since the US and Israel launched strikes on the country on Feb. 28, with investors turning to the dollar amid rate hike fears, bearish for gold since it offers no yield.
"Higher energy costs have revived the prospect of a Fed rate hike. Money markets now price roughly a 35% chance of an increase at next week's FOMC meeting, up from about 10% a week ago, with a hike fully priced by September," Saxo Bank noted.
The dollar inched higher, with the ICE dollar index last seen up 0.03% at 101.47 per ounce. Treasury yields moved lower, with the yield on the US two-year note last seen down 2.0 basis points to 4.335%, while the 10-year note was paying 4.683%, down 1.7 points.