US gold futures rose 0.5 percent to $1,287.80 per ounce.
"It looks very optimistic and fundamentally supportive for gold as the overall mood is still very uncertain and the market confidence is still weak on global growth worries," said Benjamin Lu Jiaxuan, a commodities analyst at Phillip Futures.
The dollar index, which tracks the greenback against a basket of major currencies, was hovering near a two-month low hit in the previous session.
"The global economy has entered into an uncharted territory considering the fact that the Chinese data was worse than expected," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
"With uncertainties on global economy and geopolitical concerns, it's just a matter of time gold is going to shoot up."
Markets were looking for views from Federal Reserve Chairman Jerome Powell on the US economic outlook and hints about rate hikes in 2019 when he participates in a joint discussion with former Fed chairs Janet Yellen and Ben Bernanke on Friday.