Gold rose more than one percent to a near three-week high on Wednesday, bolstered by a weaker dollar on declining expectations that the U.S. Federal Reserve will raise interest rates any time soon.
Investors have almost priced out the chance of a rate increase at the Fed's June 14-15 policy review, and see the likelihood of a July rate hike reduced to around 26 percent since disappointing jobs data last week and comments by Fed Chair Janet Yellen on Monday.
Spot gold rose 1.3 percent to $1,259.85 an ounce earlier, its strongest since May 20 and was up 1.1 percent at $1,258.13 by 1306 GMT.
U.S. gold climbed 1.35 percent to $1,263.30.
"Gold could easily see a further $20 an increase, given favorable macroeconomic news, but only a break above $1,290 would encourage new demand to come in," MKS SA head of trading Afshin Nabavi said.