Gold prices hit one-month highs on Friday and were on track for their best year since 2010, driven higher over the past 12 months mainly by a weaker dollar and safe-haven buying prompted by global political uncertainties.
Spot gold was up 0.1 percent at $1,295.45 an ounce at 0735 GMT, having hit its highest since Nov. 29 at $1,296.26.
U.S. gold futures were steady at $1,297.50 an ounce.
Gold, which is also on track for its best month since August, has benefited from technically-driven momentum as well as the dollar downtrend, analysts said.
Spot gold has gained more than 1.7 percent so far this week, heading for its third straight weekly rise, and added more than 12 percent for the year.
The dollar index is down more than 9 percent this year, set for its biggest annual loss since 2003. That weakness has helped lift gold almost 5 percent from a near five-month low of $1,235.92 struck in mid-December. [.DXY]
Many investors had predicted the dollar would get a boost from U.S. tax cuts, tighter central bank monetary policy and strong growth rates in 2017.
The greenback hit its strongest in 14 years at the start of 2017 on hopes that newly elected U.S. President Donald Trump would implement pro-growth, pro-inflation measures.
Instead, the currency has weakened on doubts Trump would succeed in implementing some of the programmes he had highlighted in his campaign.
"The fact that both the dollar and interest rates have been heading lower ever since the tax bill has passed tells us that investors may be seeing the measure as falling short in its primary aim of spurring growth," INTL FCStone analyst Edward Meir said.
"It remains to be seen what gold does from here as it approaches key resistance between $1,300–$1,320," Meir said.
"The weaker dollar could provide more upside fodder for the precious metal going into the New Year, as could a modest wobble in U.S. equity markets. But, the geopolitical backdrop looks fairly tame and would not lend much support," Meir said.
Gold as a safe-haven asset has been supported this year as the United States, China and other world powers have worked to contain North Korea's nuclear ambitions.
Among the precious metals, palladium has been the best performer this year, rising more than 57 percent due to strong demand from autocatalyst makers amid production shortages.
Spot palladium rose 0.2 percent to $1,067.58 an ounce on Friday, having hit its highest since February 2001 at $1,072 in the prior session.
Spot silver fell 0.2 percent to $16.83 on Friday. Prices hit their highest in over a month on Thursday at $16.88 an ounce.
Spot platinum rose 0.3 percent to $926 on Friday, after touching a more than three-week high in the previous session at $927.50 an ounce.