Spot gold was up 0.3pc at $1,345.28 per ounce, as of 0504 GMT, after hitting a session high of $1,347.81, less than $1 away from its 14-month peak of $1,348.08 touched last week.
Bullion has risen 0.4pc so far this week, keeping the yellow metal on track for its fourth consecutive weekly gain.
US gold futures rose 0.4pc to $1,348.60 an ounce.
"Concerns around Middle East and potential conflicts are one of the factors.
There is also investment drive here with bonds renewing their rally, it appears growth concerns remain," said Michael McCarthy, chief market strategist, CMC Markets.
"Growth concerns and interest rate expectations support gold market. In low growth, highly liquid environment, money has to find a home, it appears a number of investors have concluded that gold would one of those homes."
On Thursday, Washington blamed Iran for attacks on two oil tankers in the Gulf of Oman, where Norwegian-owned Front Altair or the Japanese-owned Kokuka Courageous experienced explosions, forcing crews to abandon ship and leave the vessels adrift in waters.
This coupled with an importunate Sino-US trade conflict pushed investors to the edge, with more than 600 US companies urging President Donald Trump on Thursday to resolve the dispute, saying tariffs hurt American businesses and consumers.
Impact of the long-drawn trade war was also evident on the US labor market, which saw an unexpected rise in the number of Americans filing applications for unemployment over the last week.
Another data showed US import prices fell by the most in five months in May in the latest indication of muted inflation pressures.
This further fuelled expectations of rate cut by US Federal Reserve, pulling short-dated US Treasury yields lower on Thursday, and steepening the yield curve ahead of Friday's retail sales data and the central bank's meeting next week.
"Gold traded higher as its appeal as an alternative investment in times of uncertainty.
The yellow metal has risen as the probabilities of a summer interest rate cut by the Fed have increased," Alfonso Esparza, a senior market analyst at OANDA, said in a note.
Among other precious metals, silver gained 0.3pc to $14.94 and platinum rose 0.7pc to $813.35.
Palladium climbed 0.2pc to $1,447.51 after hitting its highest since April 29 at $1,450.39 earlier in the session.
The auto-catalyst metal gained 6.6pc so far this week and is set to post its best week since week ended Sept. 21, 2018.