Gold dipped on Friday on profit-taking after a sharp overnight jump, but the metal is being supported by a wave of risk aversion after a Malaysian airliner was downed in eastern Ukraine, killing nearly 300 people.
Gold, seen as an alternative investment during times of geopolitical uncertainty, rose about 1.5 percent in the previous session after news of the plane crash, which a Ukrainian official said was caused by a missile fired by pro-Russian militants.
The incident sharply raises the stakes in a conflict between Kiev and pro-Moscow rebels that has been going on for months, and has escalated tensions between Russia and the West.
Spot gold slipped 0.1 percent to $1,315.40 an ounce by 0254 GMT. Asian shares sagged in early trading and a drop in Treasury yields pressured the dollar after news of the downed Malaysian airlines jet sent investors scurrying into defensive assets.
However, the metal is still down nearly 2 percent for the week, following a six-week winning streak, as fears of financial troubles in a Portugal bank fade and as investors worry about a sooner-than-expected hike in U.S. interest rates.
In a measure of investment sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 2.69 tonnes to 803.34 tonnes on Thursday.
Among other precious metals, palladium was trading near its highest since 2001 after the United States imposed its toughest sanctions yet on Russia, the biggest producer of the metal, over Moscow's failure to curb violence in Ukraine.
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