Gold rose on Thursday, snapping two days of losses, as the dollar softened ahead of the Christmas holiday break, and a recovery in oil prices helped sentiment.
Many financial centers will shut early on Thursday and stay closed on Friday for the Christmas holiday. Some will remain shut on Monday.
Bullion prices have shed 9 percent so far this year, a third year of losses, mostly due to expectations the U.S. Federal Reserve would raise interest rates, which it did this month.
"Leading into this rate hike, there was a lot of negative sentiment but now that's rebalancing, which is price supportive in the short term," Julius Baer analyst Warren Kreyzig said.
"But when people start to focus on the fundamentals of low inflation, economic growth in the U.S., the impact on gold will be bearish again," Kreyzig added.
With the first U.S. rate increase in nearly a decade out of the way, the focus is now on the pace of future hikes, analysts said.
Higher rates dent demand for non-interest paying gold, for which the outlook remains largely on the downside, with many predicting a drop below $1,000 by the end of next year.
The dollar slipped 0.3 percent against a basket of leading currencies, down for a fourth session out of five.
Data on Thursday showed U.S. weekly jobless claims slipped more than forecast near a 42-year low.
However, recent data has not been uniformly strong, with new orders for U.S. manufactured capital goods down in November and consumer sentiment at a five-month high in December.
In other markets, crude prices steadied above $37 a barrel, a fourth day of gains after hitting a lowest since early 2009 on Monday.
Gold is positively correlated to oil as the metal is seen as a hedge against oil-led inflation.
"Next year is all about inflation. The Fed's own view on interest rates is more hawkish than the market measures because the Fed is more optimistic that inflation is going to pick up quite quickly," Macquarie analyst Matthew Turner said.
"This would be good for gold ... one condition for that is the oil price remaining stable or increasing."
Silver rose 0.4 percent to $14.33 an ounce, while palladium gained 0.7 percent to $558.65 and platinum was up 1.1 percent at $877.35.