Spot gold was up 0.2 percent at $1,277.98 an ounce at 0115 GMT on Tuesday, after hitting its highest since Dec. 1 at $1,278.14.
The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 93.283.
U.S. gold futures rose 0.3 percent to $1,282.20 an ounce.
The futures market was closed for the Christmas holiday on Monday.
Palladium prices jumped to 17-year highs on Friday as strong demand from autocatalyst makers reinforced the prospect of market shortages.
Spot palladium was steady at $1,038.10 an ounce on Tuesday. It touched its highest since February 2001 at $1,042.50 on Friday.
Analysts expect that about 80 percent of global palladium demand will come from autocatalysts for gasoline-powered cars, which many now prefer over diesel-fuelled vehicles.
Japan’s core consumer prices rose for the 11th straight month and household spending jumped in November, offering the central bank some hope a steady economic recovery will gradually drive up inflation to its 2 percent target.
The Shanghai Futures Exchange cut its margin requirements for gold and silver futures contracts from Jan. 2.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.18 percent to 837.50 tonnes on Friday from 836.02 tonnes on Thursday.
Hedge funds and money managers increased their bearish position in COMEX silver contracts to a record in the week to December 19, while they increased their net long stance in gold, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
U.S. growth prospects dimmed on Friday as data showed spending outpaced income in November and the Federal Reserve’s preferred inflation measure — the personal consumption
expenditures price index that excludes food and energy — rose by just 0.1 percent in November.
The passage of a sweeping U.S. tax reform bill investors have been anxiously anticipating for months caused large redemptions in equities and bonds last week as a building consensus in the market suggested any benefits had already been priced in.
Workers at Pan African Resource’s Barberton gold mine in South Africa have ended a wildcat strike that started on Sunday, an industry source said on Friday.
Gold demand across major centers in Asia was subdued last week as a modest rebound in prices weighed on investor appetite. Source: Reuters