The gold price continued to inch up, with spot gold up 0.4 percent at $1,234.81/oz at 0731 GMT, while USA gold futures gained 0.4 percent to $1,234.90/oz, according to Reuters.
Spot gold was up 1 per cent at $1,249.43 an ounce at 1248 GMT, its highest in two weeks and taking its gains since a May 9 low of $1,213.81 to 3 per cent. The Comey memo, first reported by the New York Times, caused alarm on Capitol Hill and raised questions about whether Trump tried to interfere with a federal investigation.
As the United States ponders the uncertain future of President Donald Trump commodity markets have benefitted, especially gold.
The summer months can be quite volatile, but we should continue to see the gold market grind higher.
"This is related to a flare-up of geopolitical risks with what's happening in the US with Trump and Russian implications", Capital Economics analyst Simona Gambarini said. The White House denied the report.
Lower yields reduce the opportunity cost of holding non-yielding gold, while a weaker dollar makes bullion cheaper for non-U.S. investors.
Meanwhile, a recent run of disappointing USA economic data, including inflation, retail sales and housing starts has also weighed on the dollar, tempering expectations for higher interest rates.
Stalling equity prices also bolster gold's appeal as investors begin to acknowledge risk in the marketplace and seek safe-haven investments to protect gains.
The dismissal of Comey is creating controversy, as some have alleged that Trump enacted the firing in order to slow down the FBI's investigation into the sitting U.S president's possible ties to the Russian government, and specifically how those ties impacted the 2016 election. An unexpected fall in US homebuilding meanwhile added to a run of weak economic data, raising new doubts about how many times the Federal Reserve will raise interest rates this year.
Asian stocks fell on Thursday with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 0.6 per cent.
On the Shanghai Futures Exchange, gold for December delivery added 0.4 percent to 281.05 yuan a gram, while silver rose 0.2 percent to 4,120 yuan a kilogram.
The precious metal was trading at $1,258.50 an ounce as of 11:25 a.m. ET, a $22.10, or 1.79%, jump on the day.
Silver was 1.1 percent up at $17.01 an ounce and platinum was 1 percent higher at $946.70 an ounce.
On the technical side, gold tested resistance at its 200-day moving average and Fibonacci retracement, both at around $1,245.