Overnight, the US dollar weakened and Comex gold for December delivery jumped 3.2% to $US1323 per ounce after trading below $1300/oz for most of this month as the US government was shutdown.
Market watchers believe the US Federal Reserve will hold off on winding back stimulus measures until there is more certainty on the budget and debt issues.
"Tapering was one of the key reasons the market had been factoring lower gold prices," Foster Stockbroking said in a morning note.
"However, given the recent weaker US data coupled with the potential dent in consumer and business confidence that the US government shutdown has caused, we believe the Fed will hold off on any further tapering and gold prices should continue to find support at current levels.
"The central bank is scheduled to meet October 29-30 to review the economy and assess policy though given the current situation we believe there will be limited change."
Foster's top gold picks are Beadell Resources, which rose 4.1% to A88.5c, and Northern Star Resources, which was last trading 5% higher to 83.5c.
"We prefer exposure to quality lower cost operators who are able to maintain profitable margins despite the subdued prices," Foster said.
Newcrest Mining is having its best day in some time, trading 6% up to $10.74.
It came as CIMB analyst Michael Evans upgraded the company to outperform from neutral with a $13.50 price target in the wake of yesterday's quarterly report.
Regis Resources, which is reportedly set to release its quarterly report today, jumped 7.3% to $3.69, while Resolute Mining, which reported a solid set of numbers this morning, was up 4.6% to 56.5c.
Evolution Mining jumped 6% to 78.5c, while Kingsgate Consolidated was up 5.5% to $1.54.
Spot gold was last trading at around $US1320/oz.