Gold hit a 3-1/2 month high on Monday as fears over U.S. economic growth following a series of disappointing data sent the dollar to a six-week low and lifted demand for the metal.
Spot gold touched its highest since Oct. 31 at $1,329.55 an ounce earlier in the session and was trading up 0.7 percent at $1,327.91 by 1700 GMT. The metal posted its biggest weekly gain since August last week, climbing 4 percent.
U.S. gold futures rose for a ninth session running, up 0.7 percent to $1,328.30 an ounce, and were on track for their longest rising streak since July 2011. Volumes were low as U.S. markets were shut for a holiday on Monday.
Gold has risen 10 percent this year, after a 28 percent drop in 2013 that snapped a 12-year run of gains.
Prices have been boosted by weak U.S. and Chinese economic data, while emerging market jitters hurt some equity markets last month, spurring demand for safe-haven bullion.
But, unusually, global shares have rebounded this month, rising in tandem with gold.
"Unexpectedly, the commodity space has been generally a good place to be so far this year, with gold doing incredibly well but the big question now is how long could this continue," Saxo Bank senior manager Ole Hansen said.
"I would probably be a bit cautious because we have seen swings in the equity markets and the turmoil in emerging markets subside and that's not a strong backdrop for gold going forward."
The dollar hit a six-week low against a basket of currencies after U.S. manufacturing output data on Friday showed an unexpected fall in January.
Speculators raised their bets in gold futures and options to a three-month high, according to data from the Commodity Futures Trading Commission.
Regulatory filings showed hedge fund Paulson & Co maintained its stake in the world's biggest gold-backed exchange-traded fund, SPDR Gold Trust, in the fourth quarter.
But investor confidence is not uniformly positive and holdings of the SPDR fund fell 5.10 tonnes to 801.25 tonnes on Friday - the first drop in three weeks. They have remained relatively stable over the past few weeks, after last year's 500-tonne outflow.
Without any meaningful shift in investor sentiment and given the positive macroeconomic outlook, gold's rally may be temporary, analysts said.
"It could be pushed towards the mid-$1,400s but I have my doubts that we are back in a bull market," said Sean Corrigan, chief investment officer at asset manager Diapason.
Corrigan said Diapason's portfolio had a gold component but there were no plans to increase that.
Gold premiums in India, the world's second-biggest consumer of the metal after China, recovered 21 percent to $75 an ounce on London prices from a four-month low as the federal government kept import duty steady at a record 10 percent.
India's finance minister said on Monday that the government would look into relaxing gold imports curbs, but did not announce any immediate change.
Buying in China rose, with premiums for 99.99 percent purity gold on the Shanghai Gold Exchange up to about $7 from $5.50 on Friday, though volumes were lower.
Silver climbed to its highest since November at $21.96 an ounce, before trading up 1.6 percent at $21.80. The metal has gained 12 percent this year.
Platinum fell 0.2 percent to $1,426.50 an ounce, while palladium gained 0.7 percent to $739.50 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore and Siddesh Mayenkar in Mumbai; Editing by Jason Neely)