Gold moved towards a two-week high struck last week, as firm oil prices raised worries of inflation and a drop in the US dollar spurred buying.
Bullion, whose gains lifted silver and platinum, posted its biggest weekly percentage gain in almost two months last week, but trading was thin on Monday with Japanese speculators away for a public holiday.
Spot gold was up 0.5 per cent at $US941.40 an ounce in Asian trade, compared with New York's notional close on Friday of $US936.50 - within sight of last week's two-week high of $941.95 an ounce.
"I am a little positive for the very near term. I will be looking for a break above the previous highs of around $US941.95 for a run at the $IS950s," said Adrian Koh, analyst at Phillip Futures in Singapore, referring to levels seen in June.
"Platinum looks a little positive to me, after we moved out of the previous 1-1/2 month downtrend," he said.
A brighter outlook for the financial market has underpinned gold, but the metal is still around 6 per cent below an 11-month high above $US1000 an ounce hit in February, and remains vulnerable to
movements in both energy and currency markets.
Oil steadied above $US63 a barrel on Monday, having gained 6.1 per cent last week - its first weekly gain in a month on the back of a series of positive economic data and a rally in equities markets.
Platinum rose $US4 an ounce to $US1175 an ounce, having risen around 6 per cent last week on physical buying from auto makers in China and a dispute over wages in main producer South Africa. It hit a two-week high at $US1179 an ounce on Monday.
The National Union of Mineworkers said it had rejected an improved 8.5 per cent pay increase offer from Impala Platinum.
"There's been some physical buying out of China, although I don't think they will chase the market at
current levels," said a dealer in Hong Kong. "A surge in automobile sales in China gives support for the
market," he added.
The China Association of Automobile Manufacturers said the country's passenger car sales jumped 47.7 per cent in June to 872,900, lifted in part by government stimulus measures including a halving of
the sales tax on small cars and subsidies for buyers in rural areas.
US gold futures for August delivery added $US1.7 an ounce to $US939.2 an ounce. The contract settled up $US2.10 at $US937.50 on the COMEX division of the New York Mercantile Exchange on Friday.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1094.54 tonnes as of July 17, down 0.31 tonnes from 1094.85 tonnes the previous business day.