Gold prices eased on Friday but were set for a weekly gain as investors gravitated towards safe-haven assets amid political uncertainty in the Middle East, overshadowing pressure from a firmer dollar, reports Reuters.
Spot gold was down 0.3 per cent to $2,626.52 per ounce as of 1255 GMT. Bullion has gained 0.2 per cent so far this week. U.S. gold futures were down 0.5 per cent to $2,642.00.
"There remain geopolitical hotspots around the globe, which is keeping gold in play from a safe-haven perspective," said Tim Waterer, chief market analyst at KCM Trade.
"Between Russia-Ukraine and events in Gaza, investors remain keen on gold in case either situation flares up further."
In the Middle East, Israel struck multiple targets linked to the Iran-aligned Houthi movement in Yemen on Thursday.
While, Russian drones struck a multi-storey apartment building on Thursday in the front line town of Chasiv Yar in the Donetsk region of Ukraine.
Limiting further gains in gold, the dollar index (.DXY), opens new tab headed for a fourth straight week of gains. A stronger dollar makes bullion more expensive for other currency holders.
Gold has gained around 28 per cent so far this year, hitting a record high of $2,790.15 on Oct. 31 on the back of the Fed's rate easing and escalated tensions around the globe.
Following rate cuts in September and November, the Fed continued with its easing policy in December. However, it also hinted at the possibility of fewer reductions in 2025.
As President-elect Donald Trump is set to return to the White House in January, markets are bracing for substantial policy shifts, encompassing tariffs, deregulation, and tax amendments.
Gold typically performs well during times of economic and geopolitical uncertainty and thrives in a lower interest rate environment.
Elsewhere, gold discounts in India widened to a nearly three-month high as rising prices dampened demand, while China shifted to premium.
Spot silver fell 0.8 per cent to $29.55 per ounce, platinum lost 0.1 per cent to $935.35, both metals were on track of weekly gains. Palladium shed 0.5 per cent to $920.65.
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