Gold gets safe-haven boost

LONDON, Aug 8 (Reuters): Gold hit a 3-1/2 week high on Friday and was set for its biggest weekly gain in seven as the dollar and equities fell after U.S. President Barack Obama authorised air strikes in Iraq, adding to simmering international tensions and sapping appetite for risk.
Obama said in an address he had authorised targeted strikes to protect the besieged Yazidi minority and U.S. personnel in Iraq, after the Iraqi government requested help.
Spot gold hit its highest since July 14 at $1,322.60 an ounce earlier, and was up 0.1 per cent at $1,314.90 by 1152 GMT. The metal has gained 1.9 per cent this week, its first increase in four weeks and the highest weekly gain in seven.
U.S. gold futures for December delivery were up $3.90 at $1,316.40 an ounce.
The dollar was down 0.2 per cent against a basket of currencies, under pressure from by a 14-month low in 10-year U.S. Treasury yields.
A weaker U.S. currency makes dollar-denominated assets such as gold cheaper for other currency holders, while returns on bond yields are closely watched by the gold market, given that the metal pays no interest.
Bullion was also lifted by lower equity markets on growing fears that conflicts in Ukraine and the Middle East could sap global growth.
Fighting resumed in Gaza between Palestinian militants and Israel after a 72-hour ceasefire expired.
Moscow banned imports of most food from the West on Thursday in retaliation against sanctions against it over Ukraine, a stronger-than-expected response that isolates Russian consumers from world trade to a degree unseen since Soviet days.
The European Central Bank warned the conflict in Ukraine posed a serious risk to the bloc's economy.
Gold is usually seen as an insurance against political and financial risk, which burnish its appeal as an alternative investment.