(MENAFN- Live Mint) By Daksh Grover
(Reuters) - Gold prices rose on Friday, helped by a slight dip in the U.S. dollar and growing geopolitical tension, but remained on track for its biggest monthly decline in more than a year after Donald Trump's U.S. election victory.
Spot gold rose 0.8% to $2,662.78 per ounce, as of 0556 GMT, while U.S. gold futures gained 0.9% to $2,662.20.
The Israeli military said its air force struck a facility used by Hezbollah to store mid-range rockets in southern Lebanon on Thursday amid mutual ceasefire breach accusations.
Additionally, Russia unleashed its second big attack on Ukraine's energy infrastructure this month on Thursday, triggering deep power cuts across the country.
The escalating geopolitical tensions are making investors flock to gold in the hopes of capitalising on the potential price increases, said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Bullion is traditionally seen as a safe investment during economic and geopolitical uncertainties, such as conventional or trade wars.
"The slight weakening of the dollar has helped gold prices to gain," Lan said.
The dollar index eased 0.2%, boosting gold's appeal for holders of other currencies. [USD/]
Despite the gain on the day, gold is set for a weekly fall after a sharp sell-off earlier in the week.
Prices have slid about 3% this month, including hitting a 2-month low on Nov. 14, as the dollar rallied after Donald Trump was elected to be the next U.S. president.
Economists believe his tariff plans would stoke inflation, potentially slowing the Federal Reserve's interest rate-easing cycle.
"We note strong downside risks and anticipate significant volatility (in 2025) as we will likely see the U.S. Fed take a more cautious approach to interest rate cuts, to the detriment of gold," BMI said in a note.
Major U.S. data releases next week -- including job openings, the ADP employment report and the employment report -- will likely offer cues about the Fed's policy outlook.
Spot silver added 1.4% to $30.69 per ounce, platinum gained 1.2% to $942.50 and palladium advanced 1.43% to $989.25.
All three metals are also set for monthly declines.
(Reporting by Daksh Grover in Bengaluru; additional reporting by Swati Verma; Editing by Sumana Nandy and Savio D'Souza)
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