LONDON: Gold eased on Friday, paring its narrow gains for the month, as European shares recovered some of the previous day's declines and demand for physical metal waned on this week's pick-up in bullion prices.
Investors remain on edge over tensions between Russia and Ukraine after Ukraine said on Thursday that Russia had moved troops into the country. However, the impact of the escalating conflict has not been enough to sustain gold price increases.
Spot gold was down 0.3 percent at $1,286.04 an ounce at 1147 GMT, while US gold futures for December delivery were down $3.30 an ounce at $1,287.10.
"Looking at Treasuries, worries about Ukraine are delivering some kind of support. However, I don't think that is strong enough to trigger a more sustainable move into safe havens," Heraeus precious metals trader Alexander Zumpfe said.
"Market expectation of higher US interest rates is currently outweighing that safe-haven move." Prices are up 0.4 percent this week after falling to a two-month low at $1,273.06 last week.
"Physical demand was stronger over the couple of days when it traded below $1,280, but slowed down after strengthening to the mid-$1,290s," Zumpfe added. "Overall, the physical side is so far not delivering convincing support." European shares rose 0.2 percent, recovering some of the previous session's losses, though they pared early gains after euro zone inflation data cooled expectations of monetary stimulus from the European Central Bank.
Stock markets around the world fell on Thursday after Ukraine said Russia had moved troops into the country, deepening the regional crisis.
Nervous investors shifted money into gold and US and German government bonds.
A failure to build on those gains means that gold is set to end August little changed after spot prices traded in a range of less than $50 this month, its narrowest spread in five years.
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