Gold gained around 2 percent in thin post-Christmas trading on Friday, as crude oil prices flattened and the dollar remained flat against a basket of major currencies.
Spot gold gained as much as 2.1 percent to a session high of $1,199.00 an ounce in early trade and was up 1.8 percent at $1,194.21, well above a three-week low of $1,170.17 hit on Monday.
U.S. gold futures for delivery in February settled up $21.80, at $1,195.30 an ounce, up 1.9 percent on the day.
Higher crude prices, as unrest in Libya cut supplies, lent support to gold on Friday.
The metal, which is usually seen as a hedge against oil-fuelled inflation, has renewed its relationship with oil lately, mostly suffering from the 5-1/2-year lows hit by crude prices in previous weeks.