Spot gold gained 1.2% to $2,220.85 per ounce as of 1:50 p.m. EDT (1750 GMT), logging its best month since July 2020, at a 9% increase, and a second straight quarterly rise. Bullion hit a record high of $2,225.09 per ounce earlier in the session.
U.S. gold futures settled 1.2% higher at $2,238.4.
Traders are "position squaring ahead of the holidays and (increasing) trading activity into the month-end and quarter-end," said Daniel Ghali, commodity strategist at TD Securities, which has boosted gold prices.
Gold could rise further if the markets start to expect a deeper Fed cutting cycle, and has the potential to "hold on to these highs, but we do see signs of buying exhaustion emerging in the very near term," Ghali added.
The prices are also gaining due to "the fact that there are still major geopolitical tensions globally," which could push investors to turn to gold as a neutral reserve asset, said Everett Millman, chief market analyst with Gainesville Coins.
While there are some indications that inflation is running hotter than policymakers would like, that does not necessarily explain the high valuations for gold right now, Millman added.