SINGAPORE: Gold steadied above the $1,300 an ounce support level on Monday, aided by anticipation of increased geopolitical risks as the United States began demanding answers from Russia after a Malaysian plane was downed in eastern Ukraine.
Spot gold was little changed at $1,311.64 an ounce by 0302 GMT, after dropping 0.5 percent on Friday. Trading volumes were thin as Japanese markets were closed.
The metal jumped 1.4 percent on Thursday when news of the downed Malaysian plane that killed 298 people on board first came to light. But investors quickly banked profits the following day, causing bullion to fall 2 percent for the week, its first weekly drop in seven.
"Despite the slide in the last session, there is enough safe-haven demand to keep prices just above $1,300," said one trader in Singapore.
"There are no signs of tensions subsiding either over the Malaysian place incident or the Gaza strip, so gold will continue to see some safe-haven bids."
US Secretary of State John Kerry laid out what he called overwhelming evidence of Russian complicity in the shooting down of Malaysia Airlines flight MH17 as international horror deepened over the fate of the victims' remains.
Anger is mounting over the plane incident. Australia's prime minister expressed deep concern that Russian-backed rebels remained in control of the crash site, saying the site looked more like a "garden clean-up" than a forensic investigation.
Meanwhile in the Middle East, Hamas's armed wing said on Sunday it had captured an Israeli soldier, as fighting in Gaza led to the bloodiest losses in a nearly two-week military offensive, with some 100 Palestinians and 13 Israeli soldiers killed.
In a measure of investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.8 tonnes to 805.14 tonnes on Friday.
Speculators, however, cut bullish bets on gold futures and options in the week to July 15 for the first time in six weeks as prices tumbled.
Among other precious metals, palladium was trading near its highest since 2001 on possible supply worries that could emanate from stricter sanctions on the top producer of the metal, Russia.
Anglo American Plc will unveil on Monday its plan to dispose of its oldest South African platinum mines, a move that would reduce the global miner's staff count by a fifth of its total workforce, the Sunday Times reported.
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