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Gold rose to a three-week high on Friday, on track for its first weekly gain in four, as hopes U.S. monetary policy would remain loose after President Barack Obama's re-election and worries about looming fiscal woes boosted bullion's appeal.
Investor appetite for safe-haven assets such as gold has increased along with concerns about the U.S. "fiscal cliff", an automatic tax hike and spending cuts amounting to $600 billion due to take effect early next year that could send the U.S. economy back to recession.
"Investors have shifted their focus to the fiscal cliff after the election," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
"They believe the Fed will further ease the monetary policy to offset whatever impact that will have on the economy, which will be an incentive for gold and silver prices to climb up."
Spot gold rose to a three-week high of $1,737.60 an ounce, and traded at $1,731.77 by 0739 GMT. It jumped above the 20-day moving average at $1,718.20 for the first time in a month.
The precious metal was on course for a weekly rise of 3.4 percent, its biggest one-week gain since late August.
U.S. gold was up 0.4 percent to $1,731.90.
Technical analysis suggested that spot gold could climb to $1,749 an ounce during the day, said Reuters market analyst Wang Tao.
China's factory output quickened more than expected in October and inflation eased to its slowest pace in nearly three years, giving policymakers scope to further loosen monetary policy if needed to support growth.
Other safe-haven assets, such as the dollar and U.S. Treasuries, also firmed. The dollar hit a two-month high against a basket of currencies in the previous session, while U.S. Treasuries jumped after a strong sale of 30-year debt.
But some analysts argued that the rise in these assets and commodities was a result of investors relocating their money after having moved into equities before the U.S. election on hopes Republican candidate Mitt Romney would win.
"The strength in commodities and a 3 percent fall in the VIX volatility index in light of weak equities and rising bonds stands out," said ANZ in a research note.
"It looks like we are seeing repositioning of portfolios after the U.S. election rather than a broader risk-off move. It remains to be seen whether commodities will play catch up with the losses elsewhere."
The euro zone risk still lurks in the background, as the European Central Bank refrained from further stimulus measures and said it cannot do much more to help Greece and gave Spain none of the assurance it wants that ECB bond buying will lower its borrowing costs.
The Greek government is expected to push through the 2013 budget law on Sunday, after it voted by a razor thin margin to approve an austerity package needed to unlock vital aid and avert bankruptcy.
Echoing firming gold prices, holdings of gold-backed exchange-traded funds rose to a record high of 75.133 million ounces by November 7.
China's vehicle sales climbed 5.3 percent in October from a year earlier, rebounding after a decline in the previous month due to sluggish sales by Japanese carmakers amid a territorial dispute between the two countries.
Steady growth in the world's No.1 car market will support prices of platinum group metals, widely used in producing autocatalysts to clean up vehicle exhaust.
Spot platinum traded up half a percent to $1,547.74 an ounce, on course for a 0.6-percent weekly rise, snapping four sessions of losses. Spot palladium was down 0.2 percent to $610.49 an ounce, headed for its second weekly rise.