Gold set for weekly gains as geopolitical uncertainty boosts appeal

Gold prices eased on Friday but were on track for a third straight weekly gain, as investors sought the safe-haven metal in the backdrop of rising geopolitical tensions.

Spot gold eased 0.2 per cent to $2,729.35 per ounce due to profit-taking. Prices hit a record high of $2,758.37 on Wednesday and are up 0.3 per cent so far in the week.

US gold futures fell 0.3 per cent to $2,741.90.

US and Israeli negotiators will gather in the coming days to try to restart talks toward a deal for a ceasefire. Previous attempts to reach a deal have failed.

Elsewhere, opinion polls show the race to the White House remains tight, with less than two weeks to go before the Nov. 5 presidential election.

"These elections are more dynamic and unpredictable than many previous ones. Such volatility creates additional interest in gold," said Julia Khandoshko, CEO at European broker Mind Money.

"In the next three months, gold may reach $2,800, and from the annual perspective, it can surpass the psychologically important $3,000 barrier."

On the physical front, demand in India ticked up this week ahead of a key festival but volumes were low due to sky-high prices.

Palladium dipped 1.9 per cent to $1,134.75 but firmed 5 per cent for the week. Platinum lost 1.5 per cent to $1,010.55.

The US asked the Group of Seven allies to consider sanctions on Russian palladium and titanium, Bloomberg News reported. Russia's Nornickel is the world's largest palladium producer.

"The possibility of disruptions to Russian supply comes as the rest of the market struggles to maintain output," said Daniel Hynes, senior commodity strategist at ANZ.

Spot silver fell 0.7 per cent to $33.46, after hitting its highest level since 2012 earlier this week.

"Silver benefits from its dual role of monetary value and as an industrial metal with growth driven by the breakneck growth of photovoltaics," said Paul Wong, market strategist at Sprott Asset Management.