By Apeksha Nair
(Reuters) - Gold rebounded from a four-week low on Friday as the latest twist in tensions between the United States and North Korea prompted investors to seek safe-haven assets.
Spot gold was up 0.4 percent at $1,296.41 an ounce, as of 0643 GMT, having hit a four-week low of $1,287.61 in the previous session.
Bullion was down 1.7 percent for the week and was headed for a second weekly decline.
U.S. gold futures for December delivery climbed 0.4 percent to $1,299.80 an ounce.
U.S. President Donald Trump ordered new sanctions against North Korea on Thursday and Pyongyang's leader defiantly vowed to persist with its nuclear and missile programmes and said it would consider measures against the United States.
North Korea said on Friday it might test a hydrogen bomb on the Pacific Ocean after Trump vowed to destroy the country, with leader Kim Jong Un promising to make a "mentally deranged" Trump pay dearly for his threats.
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"Recent fiery rhetoric between the North Koreans and President Trump has led to a mild rebound in the gold price, but not enough to breach the important $1,300/oz mark," said John Sharma, economist at National Australia Bank.
"It appears there is some concern among market participants about these comments, but they are discounted somewhat given past examples of bluster between these protagonists," Sharma said.
The dollar and Asian stocks fell on Friday against the backdrop of these tensions while the Japanese yen and Swiss franc gained on the possibility of North Korea conducting another nuclear test.
Geopolitical risks typically boost demand for safe-haven assets such as gold and the Japanese yen.
"The dollar-yen's pullback has supported gold on this move higher," a Hong Kong-based trader said.
However, the U.S. Federal Reserve's indication on Wednesday of one more rate increase by the end of the year could continue to weigh on gold, the trader said.
Gold is highly sensitive to rising interest rates because they increase the opportunity cost of holding non-yielding bullion.
Spot gold may end its current weak bounce around a resistance at $1,299 per ounce and then fall towards a support at $1,281, said Reuters technicals analyst Wang Tao.
Silver climbed 0.5 percent to $17.02 an ounce, while platinum inched up 0.2 percent to $937 an ounce.
Both metals were, however, set for a second weekly decline.
Palladium rose 0.4 percent to $913.75 an ounce but was set to post a third straight weekly loss.
(Reporting by Apeksha Nair in Bengaluru; Editing by Sherry Jacob-Phillips and Amrutha Gayathri)