Gold rose on Monday, helped by a weaker dollar on expectations that the US Federal Reserve might apply brakes on its monetary tightening cycle in 2019, although an improved risk appetite limited gains for the safe haven metal.
Spot palladium, meanwhile - which broke through $1,300 on Friday to hit its highest on record at $1,310 per ounce - eased slightly, but was still trading at a slight premium to gold.
Spot gold was up 0.3 percent at $1,288.60 per ounce, as of 0306 GMT and US gold futures gained about 0.4 percent to $1,290.70 per ounce.
"The dollar is weak, aiding gold. Also, Jerome Powell's views on Friday about the future of interest rate hikes is a bullish factor for gold," said Yuichi Ikemizu, Tokyo branch manager, ICBC Standard Bank.
US Fed chairman Jerome Powell said on Friday that he was aware of the risks related to an economic slowdown and would be patient and flexible in policy decisions this year.
"Gold prices will be going higher in due time because of the Fed comments. Maybe, people have already started buying," Ikemizu said.
The dollar index, which tracks the US currency against six major peers, fell 0.2 percent.
Investors had expected the Fed to stay on its tightening path after three hikes last year, but the ongoing trade war and recent disappointing corporate earnings have put those expectations to rest.
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.
"Given the uncertain financial market climate, gold should continue to flourish, and for those that have missed the boat, pullbacks could be an excellent opportunity to engage," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.
"But in the unlikely case that stock markets start to draw more affection from investors, gold could struggle over the near term to regain momentum and prices could slip aggressively."
A relief rally in Asian equities triggered by the Fed's dovish stance and strong US jobs data limited the yellow metal's upward momentum.
An upbeat US non-farm payrolls report on Friday showed 312,000 net new jobs were created in December, while wages rose at a brisk annual pace of 3.2 percent.
Meanwhile, markets were closely watching trade negotiations between Washington and Beijing starting later today.
US President Donald Trump said on Friday that China's weakening economic growth puts the United States in a strong position as negotiators, increasing investors optimism for a probable trade deal between the world's two largest economies.
Indicating investor appetite for gold, holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37 percent to 798.25 on Thursday.
Among other precious metals, palladium was down 0.3 percent at $1,296.99 per ounce.
Silver was up 0.5 percent at $15.77 per ounce, while platinum gained 0.1 percent to $823.40.
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