Gold prices jumped to their highest in more than three months on Tuesday on a weakening dollar, with the metal on track for its best annual show in nearly a decade, while palladium leapt towards its fourth straight yearly gain.
Spot gold hit its highest since Sept. 25 at $1,525.20 and was up 0.6% to $1,524.44 per ounce by 0727 GMT. US gold futures rose 0.6% to $1,527.60.
Bullion has gained nearly 19% in the year, its biggest since 2010, mainly driven by a tariff war between the United States and China, which triggered monetary policy easing by major central banks.
"One of the main drivers behind gold's gain is the weakening in the dollar," said Margaret Yang Yan, a market analyst at CMC Markets, adding prices also rose on year-end bargain-hunting.
"With liquidity much reduced in Asia, there is some potential for gold to spike higher on low volume with some risk hedging added into the mix," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA, in a note. "The next resistance is at $1,535 an ounce."
Further supporting gold, Asian shares slipped as investors locked in gains after a buoyant year of gains. Speculators raised their bullish positions in COMEX gold contracts in the week to Dec. 24.