Gold hit a three-month peak on Wednesday as the political risk of European elections and worries over President Donald Trump's policies stoked safe-haven demand.
Investors are concerned about the strong showing in the French presidential race of far-right candidate Marine Le Pen, who has promised to take France out of the euro zone and to hold a referendum on European Union membership.
But the euro rose as investors are also wary about Trump's protectionism and immigration policy and his hints that he would prefer a weaker dollar.
"There's underlying demand for gold as a hedge against political uncertainties on both sides of the Atlantic," said Ole Hanson, head of commodity strategy at Saxo Bank.
"Retracements have been quite shallow the past couple of weeks, especially the signal that gold wasn't going down when the dollar started going up," he added.
Spot gold was up 0.48 percent at $1,239.13 per ounce, its highest since November.
U.S. gold futures settled $3.40 higher at $1,239.50 an ounce.
Indicating heightened worries over the French elections, the gap between French 10-year government bond yields and their low-risk German equivalents was at its widest since November.
"Gold prices will continue to rise until mid-February on uncertainties in the U.S. and Europe. But, once January CPI data is released, it will give an idea about the possibility of a rate hike in March," said Jiang Shu, chief analyst at Shandong Gold Group.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, climbed 1.01 percent to 826.95 tons on Tuesday from Monday. Holdings rose for a fifth straight session.
The rise in holdings, along with recent data from U.S. Commodity Futures Trading Commission (CFTC), show an increase in long positions for managed money and a decrease in short holders, MKS PAMP Group trader Alex Thorndike said.
A bullish target at $1,249 per ounce has been temporarily aborted for spot gold and will only be resumed when the metal breaks above resistance at $1,237, according to Reuters technical analyst Wang Tao.
rose 0.47 percent to $17.79, after marking its highest since November.
jumped up 1.05 percent to $1,011.30, after touching its highest since Nov. 9 at $1,015.80.
gained 0.92 percent to $769.60.