Gold prices moved higher on Friday, as sentiment on the U.S. dollar remained vulnerable ahead of a key U.S. employment report due to be released later in the day.

Comex gold futures were up 0.28% at $1,351.60 a troy ounce by 03:00 a.m. ET (07:00 GMT).

Market participants were looking ahead to the U.S. nonfarm payrolls report due later Friday, for further indications on the strength of the job market.

The greenback briefly rebounded after the Fed, at the conclusion of its policy meeting on Wednesday, signaled its confidence about inflation and growth in the U.S.

The Fed said that inflation is likely to rise this year, boosting expectations for further interest rate hikes under incoming central bank head Jerome Powell.

The Fed left rates unchanged on Wednesday, in widely expected move. The meeting was current Fed chair Janet Yellen's last.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 88.53.

Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency.