The precious metal was recently trading at $1,280.65 a troy ounce, up 0.5% from late Thursday.
The gains came as the euro climbed to $1.3134, up from $1.3079 late Thursday in New York and up 3.6% from the start of the week. Analysts said that, with the uptrend still intact, a continued rally appears increasingly likely.
"The market is now looking at $1,300 an ounce, but it will all depend on whether the currency moves seen over the past four or five days continue," said Daniel Major, metals analyst at the Royal Bank Of Scotland. Analysts said gold needed to make a sustained breach of $1,275 an ounce for prices to test the $1,300 barrier—a level targeted by many investors and analysts.
However, in a monthly research report released Friday, ABN Amro and VM Group warned some "bearish sentiment is beginning to creep in." The report forecast gold would pull back to around $1,240 an ounce by the end of the year and predicted an average price of $1,253 an ounce in 2011.
"Since the start of 2008 gold has outperformed other major asset classes, appreciating by 49%, while equity markets and some other key commodities, notably oil, remain in negative territory over the same period," the report said. "For the price to rally much further, the market may well require a large shock."
The metal may find further direction from the U.S. consumer-price index and the Michigan consumer-confidence survey, to be released later Friday, market players said.
Spot silver was trading at $20.89 an ounce, up 0.8% from the previous day and 8% higher compared with the start of the month. The ABN Amro-VM Group report said it "sees silver benefiting alongside gold, but expect a bumpy ride."
The platinum-group metals were also higher. Spot platinum was up 0.9% at $1,618.40 an ounce and spot palladium was 0.6% higher at $550.80 an ounce.
