Gold prices edged higher to a two-week peak on Monday as the dollar slid to a six-week low after a G20 weekend summit dominated by the US administration's protectionist stance. The precious metal has been rising since Wednesday, when the dollar dropped after the Federal Reserve raised US interest rates but stopped short of predicting a sharper acceleration in monetary tightening over the next two years.
The dollar fell to a six-week low before recovering to trade 0.1 percent higher against a basket of currencies.
Gold is sensitive to falling interest rates, which reduces the opportunity cost of holding non-yielding bullion.
"I think gold prices are going to continue to rally and the target to the upside is $1,250," said Phillip Streible, senior commodities broker for RJO Futures in Chicago.
Markets had been volatile as FBI Director James Comey spoke on Monday, confirming the agency was investigating possible Russian government efforts to interfere in the 2016 US election including any links between President Donald Trump's campaign and Moscow.
Spot gold rose 0.44 percent to $1,233.92 an ounce by 2:14 EDT (1814 GMT), after touching $1,235.50, its highest since March 6.
US gold futures gained 0.3 percent to settle at $1,234.00.
Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade at the weekend, acquiescing to an increasingly protectionist United States. Global markets balked at the move which soured risk appetite, pressuring stocks, the dollar and oil and driving investors into safe-haven gold.
The precious metal has rebounded more than $35 from the low hit before the Fed policy announcement last Wednesday, while the dollar has fallen 1.7 percent.
Money managers reduced their net long, or buy, positions in gold by 44,058 lots to 49,835 lots during the week to March 14, the lowest since early January.
Spot gold is expected to test resistance at $1,237, a break above which could lead to gains to $1,243, Reuters technical analyst Wang Tao said.
Denting the bullish gold narrative, holdings of SPDR Gold, the world's largest gold-backed exchange-traded fund, fell 0.35 percent to 834.10 tonnes on Friday.
Spot silver rose 0.3 percent to $17.37 an ounce, while platinum was up 1.2 percent at $969.70 and palladium firmed by 1.1 percent to $781.20.
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