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PRECIOUS-Gold shines as geopolitical worries weigh on riskier assets

* Spot gold up 0.6 pct at $1,295.28

* Palladium touches 16-year high

(Update throughout, changes dateline from BENGALURU) JOHANNESBURG, Aug 18 (Reuters) - Gold was on track for a second consecutive weekly gain on Friday as political uncertainty in the United States and a suspected Islamist attack in Spain boosted bullion's safe-haven appeal. Spain mounted a sweeping anti-terrorism operation on Friday after a suspected Islamist militant drove a van into crowds in Barcelona, killing 13 people in what police suspect was one of a planned wave of attacks. Markets were also uncertain about U.S. President Donald Trump's ability to push ahead with policies after the disbandment of two high-profile business advisory councils over his remarks on violence in Virginia. "There is clearly more for financial markets to be concerned about," Danske Bank analyst Jens Pedersen said, referring to U.S. political uncertainty and the attack in Spain. "That has led to a risk-off environment, and that's supportive for gold."

Spot gold rose by 0.6 percent to $1,295.28 an ounce

percent.

U.S. gold futures for December delivery were up 0.7

percent at $1,301. Investors ditched riskier assets while the dollar eased, further supporting gold. "The discord coming out of Washington could prove supportive for gold as well, as this could pressure the dollar further, just as the Fed is casting fresh doubts about its (interest) rate timetable," said INTL FCStone analyst Edward Meir. Policymakers in Europe and the U.S. expressed concerns about unwinding monetary stimulus too soon.

Gold is sensitive to rising interest rates because they push up bond yields, increasing the opportunity cost of holding non-yielding bullion while tending to strengthen the dollar, in which gold is priced. Spot gold faces resistance at $1,291 an ounce and could hover below this level or retrace towards support at $1,271 again, said Reuters technical analyst Wang Tao.

Among other precious metals, silver climbed 1 percent

to $17.15 an ounce, having touched a two-month high of $17.25.

Platinum was up 1.2 percent at $974.80, on track for

a third straight week of gains.

Palladium touched a 16-year high of $932.50 before

giving back some gains to trade 0.3 percent up at $929, on course for a weekly gain of about 4 percent.

(Additional reporting by Apeksha Nair and Arpan Varghese in Bengaluru; Editing by David Goodman)