However, the outlook for the dollar remains strong on higher U.S. rates.
"The dollar will continue to be a drag for gold next year," Deutsche Bank analyst Michael Hsueh said.
"We have a view that we'll get 3 to 4 25-basis point U.S. rate hikes in 2016, bringing the 10-year real rate lower, although ... the yield curve is expected to ease a bit, but still not making it easy for gold," he added. "We are targeting $980 for the fourth quarter next year."
The benchmark 10-year U.S. Treasury yield steadied at 2.2 percent. As gold pays no interest, firm returns from U.S. bonds and other markets is seen as negative for the metal.
Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, rose 2.98 percent to 648.92 tonnes on Friday, the first increase in two months.
Total holdings had fallen to a seven-year low last week.
Silver rose 1.6 percent to $14.29 an ounce, while palladium dropped 0.4 percent to $553 and platinum gained 1.5 percent to $871.