Gold nudged $1,200 an ounce after the Chinese central bank made a surprise policy move and announced it was cutting its benchmark lending and deposit rates and giving banks more freedom.
Earlier on Friday morning, gold fell as comments from European Central Bank chief Mario Draghi reignited speculation that the bank will inject more monetary stimulus into the euro zone economy, driving the euro lower against the dollar. .
Draghi said inflation expectations were dropping to levels he considered excessively low. Gold, which is priced in the dollar andtends to fall when the U.S. unit strengthens, surrendered early gains after his comments.