The DXY US dollar index already seemed to be looking ahead for some slightly more upbeat language on the U.S. economy coming out this week as it rallied 0.4 percent on Friday," he said.
The Federal Reserve is close to hitting its targets for full employment and 2 percent inflation, the Fed's No. 2 policymaker said on Sunday in comments that did not address when the U.S. central bank should next raise interest rates.
A recent batch of strong U.S. employment readings have yielded upbeat views from some Fed policymakers suggesting rates could rise as soon as September, though mixed messages from the bank's latest meeting have clouded the outlook.
Minutes from the July 26-27 policy meeting showed rate setters were split over the necessity of tightening policy soon, with some arguing that more economic data was needed, including on the pace of hiring, before envisaging a hike.
Yellen is likely to cement expectations for a slow pace of rate increases.
"Yellen could provide her current assessment of the outlook for job growth, inflation and economic growth, and indicate whether caution is still appropriate or whether a rate hike might be on the horizon," economists at HSBC said in a note.
CME 30-Day Fed Fund futures are pricing in only an 18% chance of a rate hike in September, up from 15% seen Thursday. Expectations for November has risen to 25%, up from the previous level of 20%.
Markets are once again pricing in a greater than 50% chance of a move in December. By February, markets see a 54% chance of interest rate being at least 25 basis points higher. Analysts have noted that the U.S. central bank has never hiked rates unless expectations were above 50%.
However, Fung said she remains optimistic on gold as the market has been able to hold support in an environment of rising rate expectations. Still, she expects the market to remain in limbo as there is no other major event in the immediate horizon that will drive prices higher.
Oil prices dipped on Friday, retreating from eight-week highs, as market participants took profits from one of this year's strongest rallies in crude that analysts called fundamentally unjustified.
Crude futures have surged nearly $10 a barrel, or almost 25 percent, in just over two weeks on speculation that Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries will agree next month to a production freeze deal with non-OPEC members led by Russia.
International benchmark Brent crude oil futures were trading down 17 cents at $50.72 per barrel, but on pace for a roughly 8 percent gain on the week. The session peak was $51.22, the highest since June 22.
U.S. West Texas Intermediate (WTI) crude futures rose 30 cents to $48.52 a barrel. For the week, U.S. oil gained more than 9 percent from last Friday's close of $44.19. They earlier reached $48.75, its highest since July 5.
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