The price of gold hit a month high on Thursday after abruptly rebounding from a sell-off following soft US inflation figures earlier in the week.
Thursday saw the spot prices climb as high as US$2,711 an ounce to hit levels last seen in mid-December.
Gold later receded to US$2,705, but remained up 0.67% for the day and by 3.5% since the turn of the year.
Hopes for a Federal Reserve rate cut this year were revived on Wednesday as figures showed an unexpected decline in core inflation over the course of December.
Gold had faced pressure on the back of the figures, stooping as low as US$2,679, before soon regaining to wipe off the decline into Wednesday.
“If there’s one word that perfectly encapsulates gold’s performance over the past month, and particularly since the New Year, it’s resilience,” Trade Nation analyst David Morrison said.
“Gold has managed to push higher despite continued dollar strength. This resilience was exactly what was witnessed last Friday following the stronger-than-expected payroll report.”
Panmure Liberum analysts added a solid backdrop had emerged for gold, with a “US rate cut cycle in play, ballooning US debt, a looming Trump-led tariff war, waning global economic activity”.
Precious metals miner Fresnillo PLC sat among the FTSE 100's biggest risers for the day, up 2.2%, in line with the rise.