Also adding to the positive sentiment was continued strong inflows into gold-backed exchange-traded funds (ETF). On Friday, SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings rose 0.7 percent to 698.46 tonnes.
"We are seeing non-stop buying from the investment community and little selling of note," one trader said, adding that ETFs and other investment funds were moving into gold as a safe haven.
Traders said gold's 5 percent gain last week, its biggest weekly rise since July 2013, had also made many investors more convinced that the metal's rally since the start of this year was sustainable.
Some recent weak economic data, particularly from the United States and China, has led financial markets to expect there will be fewer U.S. rate hikes this year than the four they had been pricing in a few weeks ago, perhaps only one.
Lower rates cut the opportunity cost of holding gold, which earns no yield but costs to store and insure.
Hedge funds and money managers boosted their bullish bet in COMEX gold to a three-month high in the week to Feb. 2, data showed on Friday.
Other precious metals tracked gold higher. Platinum was up 1.5 percent at $921.25, after reaching $931.76, its highest since Nov. 9. Spot silver jumped 2.3 percent to $15.32 an ounce, after briefly touching $15.46, its highest since Nov. 3.
Palladium was up 2.4 percent at $513.05 an ounce.
— CNBC's Gina Francolla and Christopher Hayes contributed to this report.