Gold futures have risen amid growing worries over legislative gridlock in Washington and hopes of continued stimulus from the Federal Reserve.
The most actively traded contract, for December delivery, on Friday rose $US15.10, or 1.1 per cent, to settle at $US1,339.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold was up 0.5 per cent on the week.
Gold prices marched higher as US lawmakers grappled to pass a short-term bill to fund the federal government. Lawmakers must agree on the so-called stop-gap measure by October 1, or face a partial government shutdown.
"Our wonderful senators and congressmen have definitely helped put the markets in a very tense, nervous mood that played into gold today," said Bill O'Neill, a principal with Logic Advisors.
Some investors consider gold a store of value and a hedge against political and economic uncertainty.
Gold prices also drew strength from hopes of sustained monetary stimulus measures after Federal Reserve Bank of Chicago President Charles Evans said the central bank could keep monetary policy unchanged at its October meeting.
"We need to see further developments of the positive variety for the economy to have that added confidence. It wouldn't surprise me if we go a little bit longer," Evans told reporters on the sidelines of a monetary policy conference in Oslo, Norway.
Evans is a voting member of the Federal Open Market Committee and is considered one of the more dovish members of the Fed when it comes to interest rates and inflation, supporting a longer period of accommodative measures.
"The gold-market bulls chose to jump on those specific Evans remarks they deemed to be bullish," said Jim Wyckoff, a senior analyst with Kitco.com, in a note to clients.
Wyckoff said Evan's overall remarks were ambiguous.
Gold prices have been acutely sensitive to the differing views presented by Fed officials in recent days, after the central bank surprised traders by keeping monetary policy unchanged at its September meeting.
Gold traders worry that ending the Fed's $US85 billion-a-month bond-purchasing effort will allow bond yields to rise, sapping investor interest in a zero-yielding asset like gold.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,341.00; previous PM $1,333.00
Dec gold $1,339.20, up $15.50; Range $1,320.00-$1,345.20
Dec silver $21.831, up 6.5 cents; Range $21.410-$22.175
Oct platinum $1,419.20, up $4.50; Range $1,401.00-$1,425.50
Dec palladium $731.80, up $8.35; Range $720.50-$736.55