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Gold notches gains as tensions build between Ukraine, Russia

AP

Gold steadied above the $1,300 an ounce support level on Monday, aided by anticipation of increased geopolitical risks as the United States began demanding answers from Russia after a Malaysian plane was downed in eastern Ukraine.

Spot gold was up 0.3 percent near $1,312 an ounce in thin trading, after dropping 0.5 percent on Friday. The metal jumped 1.4 percent on Thursday when news of the downed Malaysian plane that killed 298 people on board first came to light. But investors quickly banked profits the following day, causing bullion to fall 2 percent for the week, its first weekly drop in seven.

U.S. Gold futures for August delivery rose $4.50 to settle at $1,313.90 an ounce.

U.S. Secretary of State John Kerry laid out what he called overwhelming evidence of Russian complicity in the shooting down of Malaysia Airlines flight MH17 as international horror deepened over the fate of the victims' remains.

Anger is mounting over the plane incident. Australia's prime minister expressed deep concern that Russian-backed rebels remained in control of the crash site, saying the site looked more like a "garden clean-up" than a forensic investigation.

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Meanwhile in the Middle East, Hamas's armed wing said on Sunday it had captured an Israeli soldier, as fighting in Gaza led to the bloodiest losses in a nearly two-week military offensive, with some 100 Palestinians and 13 Israeli soldiers killed.

In a measure of investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.8 tons to 805.14 tons on Friday. Speculators, however, cut bullish bets on gold futures and options in the week to July 15 for the first time in six weeks as prices tumbled.

--By Reuters. For more information on precious metals, please click here.

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