Gold jumped on Thursday as the dollar remained under pressure on uncertainty around future U.S. interest rates increases, while global shares fell, rekindling investor appetite for safer assets.
Minutes from the Federal Reserve's March meeting showed policymakers debated whether an interest rate hike would be needed in April, but a consensus emerged that risks from a global economic slowdown warranted a cautious approach.
They signaled that they expected to raise rates twice in 2016 but the timing still appears unclear.
Spot gold benefited from a 17-month low in the dollar versus the Japanese yen. Prices hit a two-week high of $1,243.45 an ounce and were up 1.29 percent at $1,237.60. The metal saw its biggest quarterly rise in nearly 30 years in the three months to March, rallying more than 16 percent and hitting a 13-month high on speculation the Fed was not in a hurry to normalize interest rates.
It had however drifted back towards the key $1,200 level in the past week after hawkish comments from several Fed officials.
Gold is sensitive to rate increases as they lift the opportunity cost of holding the non-interest-yielding metal.
"The Fed's minutes yesterday and the dollar's weakness have created an environment that gives gold an additional push and attract some pent-up demand," Saxo Bank senior manager Ole Hansen said.
"The most immediate resistance is $1,244 but a break above $1,255 could suggest a new high in the market."
The Fed should be patient and cautious about raising short-term interest rates, but should nevertheless increase them in a sustained way, Dallas Fed President Robert Kaplan said on Wednesday.
European and U.S. shares fell on Thursday on uncertainty over global growth.
"The share markets are in the red and that is helping gold's ascent today... a run towards $1,250 is possible," MKS SA head of trading Afshin Nabavi said.
Assets in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.51 percent to 819.60 tonnes on Wednesday, the first inflow in nearly two weeks.
Silver futures gained 0.87 percent to $15.19, platinum futures rose 0.9 percent to $953.50 and palladium futures were down 0.49 percent at $535.30.