Gold prices rose, as a softer dollar encouraged demand for the precious metal.

Gold rallied to its highest level since August 2014 at $1,315.61 an ounce on Thursday, as the U.S. Federal Reserve held interest rates and rising expectations that the U.K. could exit the European Union bolstered demand ahead of the referendum on June 23.

Gains tapered off, however, after the referendum campaign was paused later on Thursday following the killing of 41-year-old Labour Party lawmaker and Remain campaigner, Jo Cox, in northern England.

"Gold experienced an aggressive selloff during trading on Thursday with prices cutting below $1,285 following the suspension of the Brexit campaign which offered a foundation for bearish investors to pounce," said Lukman Otunuga, a research analyst at FXTM brokerage.

"It seems that gold prices have been dictated by Brexit expectations and with the suspension of the Brexit campaign bolstering speculation of a 'Bremain' victory, gold prices plummeted," he said.

The greenback softened Friday, which made dollar-denominated gold cheaper to buy for those holding other currencies. The Dollar Index, which tracks the dollar against a basket of 16 currencies, was recently down 0.23% at 86.22.

Looking ahead, prices may dip slightly as safe-haven demand stalls.

"A $108 rally in gold prices over 10 days may mean a lot of safe-haven buying has already happened and with the likely outcome of the Brexit vote far from clear, longs may well be tempted to take profits," said William Adams, head of research at Fastmarkets.