Gold tends to gain when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion.
On Wednesday, bullion rose to US$1,279.85 an ounce, the highest since November 10, before trading at US$1,274 by 3:29 p.m.in Singapore, according to Bloomberg generic pricing.
Gold pulled back from an earlier five-month high on Thursday as the dollar clawed back some of the ground it lost after U.S. President Donald Trump said the U.S. currency was too strong.
USA gold futures ended the session 1.6 per cent higher at $US1274.20.
Fears of a new weapons test by North Korea as a US carrier group sailed towards the region, as well as worries about the upcoming French presidential election, still kept investors on edge.
"The short term geopolitical impact will likely fade but (gold) was oversold on expectations of rate hikes and the reality of muted rate hikes sets up the potential for (further) upside", said Hamza Khan, head of commodities strategy at ING.
The Japanese yen continues to appreciate against the dollar this morning, as the two major flashpoints on the world stage both involve U.S. military action, or the threat thereof. The firm's 50 day moving average price is $36.47 and its 200 day moving average price is $37.18.
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This statement alone gave gold a pretty big jump hovering above $1,280, with $1,300 the next key level the 200-day moving average providing crucial support, according to MKS Pamp Group Trader Jason Cerisola.
Spot gold was mostly unchanged at $1,273.51 per ounce by 1016 GMT.
Russian Federation must withdraw support from Syrian President Bashar al-Assad's regime if it wants an "important role" in talks about Syria's future, Secretary of State Rex Tillerson told reporters on Tuesday in Italy, where he was attending a meeting of foreign ministers from the Group of Seven nations.
Market liquidity was thin due to Passover and Good Friday holiday observances around the world.
The uncertainty is supporting physical demand for gold, with holdings in SPDR Gold Shares, the largest exchange-traded fund backed by gold, rising 4.2 tonnes to 842.4 tonnes as of Tuesday.
"The recent rise in imports is the result of the rise in demand expected during the wedding season, which has just begun, and for the Hindu festival of Akshaya Tritiya at the end of the month", Commerzbank said in a note.
Among other precious metals, spot silver inched 0.1-percent higher at US$18.51 an ounce, after touching a five-month high of US$18.599 in the previous session. Platinum was 0.2 per cent higher at $970.85, while palladium rose 0.9 per cent to $804.