The pound and stocks also slid on fears of a "hard" Brexit after British Prime Minister Theresa May said at the weekend she was not interested in Britain keeping "bits" of its EU membership.
Gold, often seen as an alternative investment during times of geopolitical and financial uncertainty, benefited from the risk-averse sentiment in the market.
Spot gold was up 0.44 percent to $1,186.36 an ounce by 12:03 p.m. ET (1703 GMT), earlier reaching its highest since Dec. 15.
U.S. gold futures were up 0.16 percent at $1,186.7 per ounce.
ABN AMRO commodity strategy Georgette Boele said the combination of a soft dollar, lower U.S. yields and risk aversion created a supportive environment for gold.
"We have this Trump conference coming up tomorrow and the market seems to be a bit nervous ahead of it," Boele said, adding that this sentiment would be short-lived as U.S. interest rates are expected to rise at least three times, denting gold.