Gold settled 1 percent higher on Friday, boosted by renewed fund buying and equities' weakness after bullion posted its worst annual decline in more than 30 years.
A combination of brisk coin buying, strong Chinese physical demand and new positions initiated by funds related to new-year index rebalancing also helped lift gold to a weekly gain of more than 2 percent, its largest rise in 10 weeks.
Analysts said that gold appeared to find support from equities' losses this week after bullion's tumble and the stock market's strong run last year.
"Positive bullion prices in reaction to the decline in equities may set the tone for 2014 and reinforce the negative correlation between the two,'' said James Steel, chief precious metals analyst at HSBC.
Spot gold was up 1.1 percent to $1,238 an ounce after hitting $1,240.00 earlier—its highest since Dec. 18.
U.S. gold futures for February delivery settled 1.1 percent higher at $1,238.60 an ounce, up 2 percent on the week.
Gold's gains came after it lost nearly 30 percent in 2013, ending a 12-year bull run, largely due to the U.S. Federal Reserve's plans to unwind its monetary stimulus program.