Gold extended gains on Thursday to a one-month high on a strong technical outlook and a U.S. dollar at a four-week low, as palladium prices reversed earlier losses to touch a fresh 17-year high.
The metal benefited from technically driven momentum after closing above its 100-day moving average on Wednesday for the first time since late November, analysts said.
Spot gold was up 0.59 percent at $1,294.58 per ounce at $1,295.21 an ounce. U.S. gold futures for February delivery settled up 0.45 percent at $1,297.20 per ounce.
"The weakness in the dollar is playing its part," Naeem Aslam, chief market analyst at ThinkMarkets, said. "We do think that this trend will continue into 2018. We expect the gold price to finish the year above $1,300 mark, and that would send a strong buy signal for traders."
The dollar came under pressure on Thursday from a recent dip in U.S. 10-year bond yields, reaching its lowest in nearly four weeks against a basket of currencies.
That helped drive broad gains across commodities, with benchmark Brent crude oil futures near their highest since mid 2015, and copper at a four-year peak.
The dollar index is down more than 9 percent so far this year, and is on course for its biggest annual loss since 2003.
A weakening dollar has helped lift gold nearly 5 percent from the near five-month low of $1,235.92 it hit in mid-December after the Federal Reserve raised U.S. interest rates. The metal
is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding bullion.
Its rise has picked up further momentum in the last week from positive technical factors, analysts said. Gold is heavily influenced by chart signals, identified by analysts who study
past trading patterns to determine future moves.
"(The rally) has seen gold march up and close at the 100-day moving average in yet another positive technical development," currency broker OANDA said in a note.
"With the Relative Strength Index (RSI) still at neutral levels, the technical picture suggests there is still potential topside in this rally."
Elsewhere net gold imports to major consumer China via main conduit Hong Kong fell 23.6 percent in November from the previous month, data showed on Thursday.
Among other precious metals, was 0.88 percent higher at $16.83 an ounce after earlier hitting its highest since late November at $16.82. was up 0.6 percent at $922.50.
was up 0.93 percent at $1,070.40 an ounce, having touched its highest since February 2001 at $1,069.50 an ounce in the previous session.