Gold prices rose on Tuesday to a three-month high as the dollar weakened, and were set to mark their best year in nearly a decade on the back of US-China trade uncertainties, which pressured markets and triggered fears of a possible recession.
The metal was also on track for its best performing month since August, up 4% in December alone.
Spot gold rose 0.5% to $1,523.29 per ounce as of 10:34 a.m. ET (1534 GMT), having earlier hit a three-month high of $1,525.20.
US gold futures were up 0.5% at $1,526.30 an ounce.
"With gold starting to break out, you have a lot of traders coming in. They think this is the next leg up," said Michael Matousek, head trader at US Global Investors.
"This rally in gold and gold-related equities is just starting to ramp up ... It consolidated for six years and it's just starting to break out again."
Gold prices have risen about 18% in 2019, and are set for their best year since 2010. The long-drawn US-China trade dispute caused fears of a global economic slowdown, prompting major central banks to resort to quantitative easing, an environment supportive of gold.
US President Donald Trump said on Tuesday that Phase 1 of the trade deal would be signed on Jan. 15, though investors are cautious and await concrete details of the agreement.
"The explosive (gold) rally witnessed in recent weeks will most likely extend into 2020 despite easing trade tensions between the world's two largest economies," said FXTM analyst Lukman Otunuga
"A lingering sense of caution over trade developments and lack of details on the Phase 1 deal may also stimulate appetite for gold during Q1 of 2020."
Supporting gold in the session was a weaker US dollar, which dipped for a fourth session.
Elsewhere, palladium has soared more than 52% in 2019, marking it one of the top performers in commodity assets for the year.
The metal has inched 0.1% higher in the session to $1,924.31 an ounce and has gained nearly 5% in December.
Palladium's rally was triggered by concerns that its supply is limited as demand mounts, lifting it to nearly $2,000 an ounce.
Platinum was up over 2% at $978.18, having added almost 9% in the month, and set for its best performing month since January 2017. Silver gained 0.3% to $17.97 an ounce, and added 16% in 2019. Both metals were en route to their best years since 2009 and 2010, respectively.
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