* Markets are looking for first rate hike in 2018 next week
* Mueller investigation adds to U.S. political worries
* SPDR Gold holdings rise 0.5 percent on Thursday
(Adds quote, updates prices) March 16 (Reuters) - Gold prices held firm on Friday as tensions between the United Kingdom and Russia and renewed U.S. political concerns offset worries about a possible U.S. rate hike next week.
Spot gold was unchanged at $1,315.50 per ounce at
0200 GMT. Spot gold has fallen 0.6 percent so far this week.
U.S. gold futures for April delivery fell 0.2
percent to $1,315.20 per ounce. Gold prices fell 0.7 percent in the previous session, under pressure from a stronger U.S. dollar.
The dollar rose versus a currency basket as traders,
awaiting next week's Federal Reserve meeting, eyed data that showed the number of Americans filing for unemployment benefits fell last week. The U.S. Federal Reserve will begin its two-day rate setting meeting on March 20, at which the U.S. central bank is expected to raise interest rates for the first time this year.
"Investors are starting to focus on next week's Fed meeting, which should be constructive for the dollar and bearish for gold," said INTL FCStone. Gold is highly sensitive to rising U.S. interest rates, because it becomes less attractive to investors since it does not bear interest. Meanwhile, Moscow said it would retaliate against London's move to expel 23 Russian diplomats over a nerve toxin attack on a Russian former double agent in Britain.
Growing U.S. political uncertainties following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration have also left investors worried. Worries over the U.S. investigation into the Trump Organization also tested investor nerves, already frayed by fears U.S. tariffs could hurt the global economy and trigger a trade war. U.S. Special Counsel Robert Mueller has subpoenaed the Trump Organization for documents, including some related to Russia, the New York Times reported on Thursday, citing two people briefed on the matter. The rise of geopolitical tensions between the UK and Russia likely tempered any selloff in gold despite a firmer dollar, Stephen Innes, APAC trading head at OANDA said. "Traders remain incredibly indecisive about the course of Fed policy, and all asset markets are enduring position adjustments where the lack of investor participation could exaggerate price action."
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, rose 0.53 percent to 838.15 tonnes on Thursday from Wednesday. Holdings saw their highest inflows since January on Thursday.
Among other precious metals, silver was flat at
Platinum was steady at $953.90, while palladium
fell 0.1 percent to $985.50.
(Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin)