Gold poised for weekly gain as Ukraine crisis spurs safe-haven demand

Gold prices were on pace to post their best week in three as the ongoing Ukraine war bolstered the safe-haven metal`s appeal, although higher U.S. Treasury yields pressured bullion on the day.

Spot gold XAU= was down 0.3% at $1,952.32 per ounce by 1222 GMT, but was holding near its highest since March 14 hit on Thursday. U.S. gold futures GCv1 shed 0.4% to $1,955.20.

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Gold, seen as a safe store of value during times of political crisis and uncertainty, has risen about 1.7% this week. GOL/ETF

Risks around Russia and Ukraine as well as talk about inflationary pressures have supported gold, StoneX analyst Rhona O`Connell said.

The Federal Reserve raised borrowing costs for the first time in three years last week March 16, and since then top U.S. central bank policymakers have signalled a more aggressive approach to monetary policy tightening this year to fight rising inflation.

Some investors perceive gold as a cushion against inflation.

Yields on the U.S. 10-year Treasury note US10YT=RR firmed near recent highs, increasing the opportunity cost of holding zero-yield bullion. US/

Spot silver XAG= rose 0.2% to $25.57 per ounce and was set to post a weekly rise of about 2.7%. Platinum XPT= fell 0.4% to $1,015.95, and palladium XPD= dipped 0.9% to $2,501.19.

"So far no sanctions have been imposed on Russian platinum group metal exports, but the possibility that some Russian supply could be disrupted going forward will likely be reflected in a higher risk premium," UBS analysts said in a note.

"We also think the surge in palladium prices is likely to accelerate the shift from palladium to platinum for use in catalytic converters."