Gold rose over one percent to over $1,675 an ounce on Thursday, on track for its biggest one-day gain since late November as signs that the European Central Bank will not cut interest rates any time soon boosted bullion buying.
Platinum group metals (PGMs) also climbed two percent as encouraging export-growth data in China triggered broad gains in industrial commodities and equities. Recent improvement in U.S. vehicle sales also boosted demand for the PGMs largely consumed as auto catalytic converters.
Gold has now rebounded more than 3 percent after hitting a 4-1/2 month low under $1,625 an ounce last week, when minutes from the Federal Reserve's policy meeting in December showed several top officials favored slowing or stopping the stimulus program "well before" the end of the year.
ECB President Mario Draghi said the euro zone economy will remain weak in 2013 and he expects a gradual recovery only later in 2013, as the ECB held interest rates at a record low of 0.75 percent.
"Gold was oversold after the Fed minutes. I don't see the Fed will be doing anything to withdraw stimulus soon," said Bill O'Neill, partner of commodities investment firm LOGIC Advisors. "Clearly, Mario Draghi is leaving room for accommodation, and the overall global pattern of central bank easing continues to be there," he said.
Spot gold rose more than a percent to trade above $1,676 an ounce, having earlier hit a one-week high of $1,678.60 an ounce. U.S. COMEX gold futures for February delivery settled up $22.50 at$1,678 an ounce, with trading volume in line to finish around its 30-day average, preliminary Reuters data showed.
Central bank monetary stimulus was a key driver behind gold's 12th year of annual gains in 2012 as investors were drawn to bullion as a hedge against inflation.
An over one percent gain in the euro against the dollar and increases in grains and crude oil further boosted gold's gain. Also underpinning gold was data showing China's export growth rebounded surprisingly sharply to a seven-month high in December after seven straight quarters of slowdown.