Picture: ISTOCK
Picture: ISTOCK

Bengaluru — Gold rose on Friday and was set to post a small gain for a second consecutive week, supported by tensions over Syria.

Spot gold rose 0.4% to $1,339.71/oz as of 3.24am GMT, and was set for a weekly gain of 0.5%. US gold futures were up 0.1% at $1,342.70/oz.

Spot gold is expected to rise to $1,348/oz, as it has found a support at $1,334, said Reuters’ technical analyst Wang Tao.

Prices were gaining on tension over Syria, which had stoked geopolitical concern, said Richard Xu, a fund manager at HuaAn Gold, China’s biggest gold exchange-traded fund.

President Donald Trump and his national security aides on Thursday discussed US options on Syria, where he has threatened missile strikes in response to a suspected poison gas attack, as a Russian envoy voiced the fear of wider conflict between Washington and Moscow. Trump, however, cast doubt over the timing of his threatened strike on Syria on Thursday, by tweeting that an attack on Syria "could be very soon or not so soon at all".

Global stocks recovered and the dollar firmed after Trump’s comments, which weighed on the dollar-denominated bullion.

Gold prices dropped 1.3% on Thursday, the biggest one-day percentage fall since March 28. Prices have fallen by more than $25/oz since climbing to an 11-week high of $1,365.23/oz on Wednesday.

The easing concern over the trade war between China and the US also weighed on gold prices in the previous session.

"Going forward I see downside risk for gold prices in general, the ebbing trade war concerns as well as improvement in growth-related news should bring safe-haven demand lower into the year ahead," said OCBC analyst Barnabas Gan.

Trump said on Thursday that the trade "negotiations" between Washington and Beijing were going well, conflicting with Chinese official statements on the dispute.

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.69% to 865.89 tonnes on Thursday.

In other precious metals, platinum was 0.2% higher at $926.74/oz.

Palladium was up 0.5% at $968.50/oz and on track for a more than 7% rise this week.

Spot silver rose 0.4% to $16.49/oz.

Global silver physical demand dropped to its lowest level in five years during 2017, led largely by a steep decline in coin and bar demand, even as industrial demand increased, according to Thomson Reuters GFMS.