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Gold prices rose over 1% on Friday to a more than one-week high as a weaker dollar boosted demand for the yellow metal, even as U.S. Federal Reserve policymakers vowed to raise interest rates to tame inflation pressures.

Spot gold rose 1.1% to $1,726.80 per ounce by 0917 GMT. Bullion was heading for its first weekly gain in four, up about 1% so far this week.

U.S. gold futures also gained 1.1% to $1,738.10.

"Coupled with the correction in the dollar, an easing in the 10-year U.S. treasury provides a welcome wind for gold," said independent analyst Ross Norman.

"Physical demand for coins and bars remain positive as does jewellery demand in an otherwise uninspiring backdrop for the yellow metal," Norman said.

The U.S. dollar dropped over 1% to its lowest in more than a week, making greenback-priced bullion less expensive for overseas buyers. [USD/][US/]

The European Central Bank delivered a 75-basis-point rate hike on Thursday, while hawkish remarks from Fed Chair Jerome Powell cemented bets of a large interest rate hike at Fed's Sept 21-22 policy meeting.

"With the Fed also expected to implement a similar sized move later this month, wouldn't naturally be conducive for gold," said Rupert Rowling, market analyst at Kinesis Money.

"...the fact that gold hasn't sunk further shows that investors still see a role for gold with economies across the world on the brink of or already in recession."

Higher interest rates increase the opportunity cost of holding non-yielding bullion. Markets are pricing in an 87% chance of a 75 bps hike this month.

Spot silver jumped 1.5% to $18.85 per ounce and was up 4.7% on the week.

Platinum rose 0.6% to $884.73 and was headed for its biggest weekly gain since June.

Palladium advanced 1.3% to $2,165.72 and was set for its biggest weekly gain since July.