Gold climbed 1.4 percent on Tuesday after President Barack Obama won the backing of two top Republicans in Congress in his call for limited U.S. strikes on Syria to punish President Bashar al-Assad for suspected use of chemical weapons against civilians.
Bullion prices rose to within striking distance to their 3-1/2-year high after John Boehner, Republican speaker of the U.S. House of Representatives, and House Majority Leader Eric Cantor both pledged support for military action.
"When we see headlines that are supportive for a possible attack on Syria, you see gold catch a bid and the U.S. equities pull back their gains," said Michael Matousek, head trader at U.S. Global Investors which has about $1.2 billion in mutual-fund assets.
Investors often move into gold as a safe haven in times of geopolitical tension.
Matousek said prices also got a boost as investors anticipated traditionally strong physical demand in September, when Indian jewelers stock inventory ahead of Hindu festivals that are major gold-buying events.
Spot gold rose as high as $1,416 an ounce and was last up 1.4 percent to $1,413.51 an ounce.
U.S. Comex gold futures for December delivery settled up $15.90 at $1,412.00.
Trading volume was about 20 percent above its 30-day average, preliminary Reuters data showed, as U.S. traders returned to work after Monday's Labor Day holiday.
Early in Tuesday's session, geopolitical tensions drove gold up after Israel tested a U.S.-backed missile system in the Mediterranean. Russia detected the launch and made a disclosure which briefly put world markets on edge as traders looked for any sign of an attack on Syria.
Gold's gains were limited after stronger-than-expected data on U.S. manufacturing and construction spending hinted the world's biggest economy was gaining traction, potentially supporting views the Federal Reserve will soon slow its massive bond-buying program.