"Light positioning and numerous upcoming geopolitical events should continue to underpin demand for the metal," said MKS PAMP trader Sam Laughlin in a note. "Targets extend to the 2017 high around $1,295 and the psychological level of $1,300 above this."
Gold has risen more than 6 percent since a low of $1,213.81 in early May as political turmoil in the United States created doubts that President Donald Trump could enact economic stimulus, pushing down the dollar and bond yields.
"The uptrend seems intact," said Mitsubishi analyst Jonathan Butler. "It's been helped by the dollar drifting lower and equity markets in the U.S. trading more or less flat."
Weak U.S. economic data has left investors less certain of aggressive U.S. interest rate rises this year, Butler said, while bullion traders had already priced in a rate rise this month.
European Central Bank policymakers will take a more benign view of the economy on Thursday
and will even discuss dropping some of their pledges to ramp up stimulus if needed, sources told Reuters.
Butler also said a decision by major gold consumer India to levy a sales tax on gold at 3 percent rather than the expected 5 percent was supporting bullion prices by spurring demand for physical metal.
In other precious metals, silver rose 1.14 percent to $17.704 an ounce, its highest level since April 25.
Palladium climbed 1.76 percent to $856.30 an ounce, its highest since September 2014 while platinum gained 1.22 percent to $962.10 an ounce after touching $967.50, the strongest
since April 24.
Platinum and palladium, mainly used to make auto catalysts that clean exhaust fumes, have rallied despite data showing weaker global auto sales in May, Julius Baer analyst Carsten Menke said in a note.
"We see technical rather than fundamental factors behind this (palladium) rally, supporting bullish sentiment in the futures market. We stick to our negative view and short position, expecting prices to realign with the weaker demand backdrop over the coming months."