* Gold supported by weaker dollar
* Prices down 0.3 percent this week
* U.S. political uncertainty fuels safe haven demand
* Investors braced for U.S. rate hike next week
(Updates throughout, adds LONDON dateline) LONDON, March 16 (Reuters) - Gold prices rose on Friday, helped by a weaker dollar and political tumult in the United States that fueled demand for bullion as a safe place to park assets. Price rises, however, were limited by expectations that the U.S. Federal Reserve will raise interest rates next week, and gold was set to end the week largely unchanged. A weaker dollar makes gold cheaper for users of other currencies, helping lift prices. Higher interest rates, however, hurt bullion because they push up bond yields, making non-yielding gold less attractive, and tend to strengthen the dollar.
Spot gold was up 0.3 percent at $1,319.67 an ounce at
1239 GMT, but on track to end the week down 0.3 percent. Gold has traded within a range between $1,315 and $1,335 since late February. The dollar has also moved sideways over that period.
U.S. gold futures for April delivery were 0.1
percent higher at $1,319.30 an ounce. Interest in gold has been fanned by U.S. policy uncertainty after the departure of former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, and planned tariffs on aluminum and steel which sparked fears of a trade war. That uncertainty deepened after the Washington Post reported that U.S. President Donald Trump will remove H.R. McMaster as his national security advisor and the New York Times said U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to Trump's businesses.
"There is a lot of confusion in the market about what the White House's strategy is on any large macro issues," said Mitsubishi Analyst Jonathan Butler. "These factors should keep gold above $1,300, but it's more of a holding pattern and a generally supportive environment than something that is going to raise prices significantly," he said. Gold is traditionally seen as a safe investment in times of uncertainty. Tit-for-tat diplomatic expulsions by Russia and Britain over an attack with a military-grade nerve agent on English soil only underlined gold's appeal. Investors, however, were looking ahead to an expected U.S. interest rate rise at a Federal Reserve meeting starting March 20. "This is likely to preclude any noticeable recovery of the gold price in the short term," said analysts at Commerzbank. On the technical side, resistance for gold was at the 50-day moving average at 1330.80 with fibonacci support at 1317.20, said analysts at ScotiaMocatta in a note.
In other precious metals, silver was up 0.5 percent
at $16.45 an ounce.
Platinum was 0.2 percent lower at $952.90 an ounce and palladium was down 0.1 percent at $985.40 an ounce.
(Additional reporting by Nallur Sethuraman and Arpan Varghese in Bengaluru Editing by Toby Davis)