Gold rose after posting a moderate gain in the prior session, with market participants evaluating Middle East developments following President Donald Trump's remarks that the US would not strike Iran ahead of the November midterm elections.

Spot gold was 0.96% higher at $4,173.11 an ounce.

Trump's remarks came as Iran accelerated attacks on tankers in the Strait of Hormuz this week, heightening concerns over a conflict now in its eighth month. This has revived inflation worries tied to rising energy costs, which has pushed some central banks to tighten monetary policy and weighed on the non-yielding precious metal.

Traders expect US borrowing costs to remain unchanged later this month but rise over the medium term. Federal Reserve Bank of St. Louis President Alberto Musalem indicated on Thursday that interest rates should climb over the next six to nine months to help inflation return to the central bank's 2% target, but stopped short of endorsing a move at this month's policy meeting.