Gold prices rose on Friday as events heated up in Ukraine, while investors digested an upbeat take on the economy from Federal Reserve Chair Janet Yellen and concluded that despite improvements taking place in the labor market, slackness persists, leading investors to believe the Fed will take its time raising interest rates.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,281.20 a troy ounce during U.S. trading, up 0.45%, up from a session low of $1,275.00 and off a high of $1,283.70.

The December contract settled down 1.53% at $1,275.40 on Thursday.

Futures were likely to find support at $1,275.00 a troy ounce, the session low, and resistance at $1,304.90, Monday's high.

Speaking at the Federal Reserve Bank of Kansas City's annual Jackson Hole symposium, Janet Yellen said the U.S. economy is recovering and added the labor market is improving as well.

"More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008. Job gains in 2014 have averaged 230,000 a month, up from the 190,000 a month pace during the preceding two years," Yellen said in prepared remarks of her speech.

"The unemployment rate, at 6.2 percent in July, has declined nearly 4 percentage points from its late 2009 peak. Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace."

Yellen's comments sparked a rally earlier for the dollar, which trades inversely with gold, though the yellow metal rebounded after markets concluded that the Fed will still take its time raising interest rates to avoid disrupting recovery.

"Underutilization of labor resources still remains significant. Given this assessment and the Committee's expectation that inflation will gradually move up toward its longer-run objective, the Committee reaffirmed its view 'that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored,'" Yellen said in prepared remarks of her speech.

Geopolitical concerns fueled safe-haven demand for gold as well.

Ukraine declared on Friday that Russia had launched a "direct invasion" of its territory after Moscow sent a convoy of aid trucks across the border into eastern Ukraine where pro-Russian rebels are fighting government forces.

Meanwhile, silver for September delivery was down 0.09% at $19.398 a troy ounce, while copper futures for September delivery were up 0.95% at $3.206 a pound.

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