Gold futures settled more that 1 percent higher on Friday, posting its biggest weekly gain in six months as a series of weak U.S. data throughout the week raised fears about economic growth, hurting the dollar.
"Gold continues to trade extremely well, and it is basically taking out one key resistance level after the other," BofA Merrill Lynch analyst Michael Widmer said.
"Fundamentally, in terms of having a sustained theme that should take gold higher, be it on the inflation side, on the monetary side, or currency side, I still don't see one, but for now it's hard to argue against it."
Chart: Precious Metals
Spot gold was up last 1.2 percent at $1,318 an ounce after rising to its highest since Nov. 7 at $1,320.90, up for an eighth straight session.
U.S. gold futures for April delivery settled $18.50 higher, at $1,318.60 an ounce, up 4.2 percent for the week in its largest such gain since mid-August.
The dollar fell 0.2 percent versus a basket of currencies, having hit its lowest since Jan. 2 earlier, as data showed U.S. manufacturing output and factory production fell in January and recorded their biggest drop since 2009.
Gold has gained nearly 9 percent since the beginning of the year, after a 28 percent drop in 2013 on doubts over the U.S. economic recovery and as emerging-market turmoil weighed on some equity markets.
Analysts remain cautious over the medium-term outlook for gold, however. Many expect the U.S. economy to recover and the dollar to rally, making the investment case for gold, usually seen as a safe haven in times of trouble, still unattractive.
"As positive as we remain on the American currency and the U.S. economy in 2014 (especially once macro estimates rebound as the weather effect passes), there is little point fighting the short-term uptrend," VTB Capital said in a note.
For more information on precious metals, please click here.