Gold held on to gains from the previous two sessions on Friday after assurances from the likely new Federal Reserve chief that the U.S. central bank would continue its easy monetary policy for a while.
The prospect of the Fed's bullion-friendly bond purchases being maintained for some time helped gold recover from a four-week low hit earlier this week and it may now end a two-week losing streak.
Yellen said on Thursday she would press forward with the central bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.
Answering questions before the Senate Banking Committee, Yellen robustly defended the Fed's steps to spur economic growth, calling efforts to boost hiring an "imperative" at a hearing into her nomination to become the first woman to lead the U.S. central bank.
"Yellen is looking for a more solid recovery before she can start easing (the stimulus)," said Helen Lau, an analyst at UOB Kay Hian Securities in Hong Kong.
"Markets were looking for a cue from her and they did get reassurances of continued quantitative easing," Lau said, referring to the Fed's bond-buying stimulus measures. "That really lifted one of the major overhangs for gold."
Spot gold eased 0.06 percent to $1,286.30 an ounce by 0732 GMT, after gaining nearly 1 percent in each of the previous two sessions.
Earlier this week, it hit a three-week low of $1,260.89.
Lau expects gold to end the year above $1,300. It has fallen nearly 25 percent this year on fears the Fed would begin slowing its $85 billion monthly bond purchases, which have helped burnish gold's inflation-hedge appeal.
Spot gold is expected to rebound to $1,299 per ounce as it has broken above resistance at $1,285, Reuters technicals analyst Wang Tao said.