Sydney - Asian shares rose for a third day on Friday led by a sharp rally in Tokyo's Nikkei, which is on track to end the first half of the year up a barnstorming 31%.
Gold, however, plumbed fresh three-year lows with investors battered and bruised after a 30% drop this year. Analysts suspect the recent leg lower was due in part to forced liquidations of positions and quarter-end selling by funds.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.9%, pulling further away from an 11-month low and wiping out this week's losses. It was still down 7.7% for the year so far.
The improved sentiment in Asian bourses came after Wall Street rallied as two more US Federal Reserve officials sought to reassure markets that any tightening was still a distant prospect.
Japan's Nikkei average jumped 3.2% to its highest in nearly four weeks, egged on by upbeat data showing consumer prices stopped falling in May and labour demand reached its strongest level in five years.
"Investors are cheered by the better data and see that Abenomics is being effective for the economy," said Takuya Takahashi, an analyst at Daiwa Securities, referring to Prime Minister Shinzo Abe's expansionary policy.
Concerns about Chinese lenders also continued to subside with the one-week cash rate back at levels seen before the recent credit squeeze that threatened to destabilise the banking sector at a time when the economy is slowing.
Still, traders said underlying worries about the Fed's plan to scale back stimulus and China's ongoing attempt to slow credit growth will make for volatile times in the months ahead.
The better mood in equity markets helped the euro push higher, although the Australian dollar missed out on the party with traders citing selling pressure from Japanese banks.
The euro rose 0.3% to $1.3071, continuing to pull away from a four-week trough around $1.2984. This saw the dollar ease 0.1% against a basket of major currencies.
Among commodities, selling bullion continued to be the main play. Spot gold fell deeper below $1 200 on Friday, reaching its lowest since August 2010. It was on track to record its worst quarter since at least 1968.
A trader in Sydney said selling emerged ahead of the opening of Chinese markets, adding that stop-loss orders were triggered when gold was sitting on the edge of $1 200.
Prices failed to find support even after markets opened in China, the world's second-biggest gold consumer.
"Chinese buying is not strong enough to support prices. Instead, speculators in China are selling," the trader said.
Other commodities were most subdued with US crude futures down 0.2% at $96.83 a barrel, while copper was a mere 0.1% lower at $6 738 a metric ton.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.