Gold steadied on Monday, after touching its highest level in nearly six weeks, as it found support from a lower dollar and a dip in equities, which improved investor confidence in the metal.
Platinum prices rose to their highest level in more than two months after the main trade union for South African platinum miners said workers at the world's top three producers would go out on strike this week.
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Spot gold was up 0.2 percent at $1,255.90 an ounce by 1259 GMT after hitting its highest level since mid-December at $1,259.46 earlier in the day. U.S. gold futures for February delivery were up $3.90 at $1,255.90 an ounce.
European shares edged lower, retreating from 5-1/2 year highs, while the dollar fell 0.2 percent versus a basket of main currencies. Liquidity was expected to be thin with U.S. markets closed on Monday for a holiday.
"Gold is grinding its way higher, but it's not really an explosion of interest that we are seeing in the move," Saxo Bank senior manager Ole Hansen said.
"The speculative data last week was quite interesting because both longs and shorts rose, indicating that the market is still very much confused on where to go next," he said. "It is not a sudden shift to one side of the equation, and until we see that, there is going to be quite a significant hurdle to break through current levels."
The metal, often seen as an alternative investment, has posted four straight weeks of gains, adding around 4 percent to its value.
Data from the Commodity Futures Trading Commission showed on Friday that hedge funds and money managers raised their bullish bets in gold and silver futures and options for a third week amid a decline in stocks.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 7.49 tonnes to 797.05 tonnes on Friday - the first increase in a month.
"I think the worst of the outflows is behind us," said Danny Laidler, head of ETF Securities' Australia and New Zealand business. "A lot of our clients are still holding onto gold as a risk-event hedge."
The price of gold plunged 28 percent last year, after a 12-year rally, on increasing optimism about a global economic recovery.
Due to the recent rally in gold prices, Chinese gold demand, which has been robust ahead of the Lunar New Year holiday at the end of the month, has come off slightly as seen on premiums and volumes on the Shanghai Gold Exchange.
Premiums for 99.99 percent purity gold eased to about $14 on Monday from $17 on Friday.
Data from China's National Bureau of Statistics showed jewellery sales in December rose 17 percent to 26.8 billion yuan ($4.4 billion), while sales for the whole year jumped 26 percent to 295.9 billion yuan.
Platinum prices rose after South Africa's Association of Mineworkers and Construction (AMCU) announced the planned strike on Thursday and said it would send notice to platinum and gold miners on Monday.
Spot platinum rose to its highest level since Nov. 7 at $1,467.75 an ounce. Palladium was down 0.4 percent at $744.00 an ounce.
Spot silver was at $20.31 an ounce, up 0.3 percent.