By Sethuraman N R
REUTERS - Gold edged up on Tuesday as rising political tensions over North Korea and the Middle East buoyed safe-haven demand for the metal.
Spot gold was up 0.3 percent at $1,257.88 per ounce by 0744 GMT, while U.S. gold futures rose 0.5 percent to $1,259.50.
Heightened tensions in the Korean peninsula and Middle East following U.S. strikes on Syria, along with the upcoming French presidential election, have made investors nervous.
"Gold should retain a measure of support given the political tensions," said INTL FCStone analyst Edward Meir.
Meanwhile, the Federal Reserve plans to raise U.S. interest rates gradually so as to sustain healthy growth without letting the economy overheat, Fed Chair Janet Yellen said on Monday. Rising interest rates lift the opportunity cost of holding non-yielding bullion.
"Rallies above $1,260 could be hard to sustain, as gold lacks momentum from a technical perspective," said Jeffrey Halley, senior market analyst at OANDA.
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"A break of $1,240 will prelude a deeper correction."
Gold has been failing to break key chart resistance at its 200-day moving average.
"Geopolitical developments are likely to continue to provide an underlying level of support over the short term, however the continued failed breaks above the 200-day moving average do not instil confidence in the metal's ability to break higher out of the recent range," MKS PAMP Group trader Sam Laughlin said.
Spot gold is still targeting $1,241 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, said Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.21 percent to 838.26 tonnes on Monday from 836.49 tonnes on Friday.
Spot silver edged up 0.2 percent to $17.95 an ounce. In the previous session, it marked its lowest in over two weeks at $17.71.
Platinum rose 1 percent to $945.60 an ounce, after hitting its weakest in over three weeks at $931.85 on Monday.
The spread between gold and platinum hit its highest since October 2016 at $318.23.
"There is certainly more geo-political risks at the moment and that is more positive (for) gold than platinum and there is no surprise in that sense to see the spread widen...There is generally a downbeat (sentiment) about diesel cars in Europe," a London-based market analyst with a mining company said.
Platinum is used as a leading catalyst in diesel-powered vehicles, which is going out of favour in Europe.
Palladium rose 0.6 percent to $792.80.
(Reporting By Nallur Sethuraman in Bengaluru; Editing by Joseph Radford and Subhranshu Sahu)
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