Gold climbed to its highest in five weeks on Tuesday as German economic data boosted the euro after several sessions of losses and as stocks and commodities were lifted by Chinese trade data, which benefited assets seen as higher risk.
Spot gold was up 1.1% at $1,662.40 an ounce at 1047 GMT, while US gold futures for February delivery were up $32.20 an ounce at $1,663.00.
Gold prices are up 6.3% this year, touching their highest since December 13 at $1,667.41 an ounce earlier in the day after falling 10% in December.
"Interest came back in really at the start of the year," said Macquarie analyst Hayden Atkins. "That rally, from where it was looking pretty dicey into year-end, has been a reinvigoration of interest. Now (it is taking) any excuse to trade up. The interest is already there."
While gold's rise since the start of the year has occurred without the benefit of a weaker dollar, it is extending gains as the euro rises versus the U.S. unit. A weaker dollar makes dollar-priced commodities cheaper for other currency holders, and boosts the metal's appeal as an alternative asset.
The euro hit the day's high versus the dollar on Tuesday, and German Bund futures extended losses after a strong reading of German business sentiment suggested the euro zone's largest economy was improving in the face of the bloc's debt crisis.
It is still down on the year, however, and the outlook for the single currency remained negative after Standard & Poor's downgraded the euro zone's EFSF bailout fund by one notch to AA+ following downgrades of sovereign credits on Friday.
Elsewhere, stocks and commodities rose after data showed China's economic growth in the latest quarter beat expectations but was still its weakest in 2-1/2 years, potentially heralding fresh pro-growth measures from the government.
"The property slowdown has gathered speed and property investment growth slowed sharply to only 12% year-on-year in December," said Societe Generale analyst Yao Wei.
"New property starts slowed all the way to only 0.9% year-on-year. It indicates that in Q1 2012 the numbers will be very unpleasant. Policy easing will continue."
