Data from the Commodity Futures Trading Commission also showed on Friday that hedge funds and money managers raised their bullish bets in gold and silver futures and options for a third week amid a decline in stocks.
Spot gold hit $1,259.46 an ounce early in Asian trading - its highest since Dec. 11. By 0803 GMT, it had dropped back to $1,254, inching up 0.03 percent on the day.
(Read more: Gold to tank in 2014: Goldman Sachs)
The metal, often seen as an alternative investment, has posted four straight weeks of gains - adding 4.2 percent to its value. Gold dropped 28 percent last year after a 12-year rally on increasing optimism about a global economic recovery.
"A lot of our clients are still holding onto gold as a risk-event hedge," said Danny Laidler, head of ETF Securities' Australia and New Zealand business.