Gold rose around 1 percent for a third straight session on Thursday as tensions between Ukraine and Russia increased and equity markets fell, but the rebound could be short-lived due to prospects of a U.S. interest rate hike.
Gold was up 0.9 percent at $1,293.90 an ounce by 1144 GMT, heading for its first weekly gain in three. It has traded in a narrow range in the past few weeks of just under $50 an ounce, the narrowest since August 2009.
U.S. gold futures rose $10.90 an ounce to $1,294.40.
"The metal rebounded today, testing the resistance around the $1,290 level ... there have been some further skirmishes along the Ukraine-Russia border, helping see some safe-haven buying," Societe Generale analyst Robin Bhar said.
"Other than that, we don't seem to be able to convincingly exit this $1,270-$1,320 range," he added. "Next week ... we have quite a busy week of data, with non-farm payrolls next week on Friday and before that we have the ECB meeting."
The metal benefited from lower European equities and worsening international political tensions after Ukraine accused Russia of launching a new military incursion across its eastern border.
Investors were eyeing U.S. jobs data later on Thursday as the strength of the jobs market is seen as a vital indicator of what the Federal Reserve's rate action will be in coming months.
Pressure is building within the Fed to more clearly acknowledge improvements in the U.S. economy as early as next month and lay the groundwork for the central bank's first interest rate hike in nearly a decade.
Higher interest rates would encourage investors to withdraw money from non-interest-bearing assets such as gold.
On the physical side, the recent fall in gold prices to a two-month low of $1,273.06 on Aug. 21 spurred some buying by the jewelry sector, but the quantity was small, dealers said.
"Demand from India, especially for silver, has picked up because of the upcoming festival season. Overall, demand has been good in the last days, but things are quieter today," a physical dealer in Singapore said.
Premiums for gold bars in Singapore remained steady at 80 cents to $1 an ounce to spot London prices.
Spot silver rose 1.7 percent to $19.75 an ounce, rebounding from a two-month low of $19.25 hit last week.
"Silver is outperforming on the basis that as gold doesn't manage to breach resistance, maybe a better way to position yourself would be in silver," Bhar said.
Spot platinum rose 1.1 percent to $1,424.75 an ounce, while spot palladium was up 0.5 percent at $893.25 an ounce.
The world's second-biggest platinum producer Impala Platinum posted a 74 percent drop in full-year earnings on Thursday after most of its South African operations were hit by a five-month wage strike and said it was reviewing options to restore profits.