Ukraine conflict pushes gold higher

Gold prices were boosted by safe haven buying on Friday, one day after a Malaysia Airlines passenger plane was shot down in Ukraine.

The death of all 298 people on board on Thursday fueled anxieties over the conflict in Ukraine, where government forces are fighting pro-Russian separatists.

Gold closed at US$1,317.25/oz in London, up US$4.75 on the previous day, but down US$3 from the Friday morning fix.

Silver closed higher at US$20.94/oz from US$20.78/oz.

"The news from east Ukraine has caused the safe haven that is gold to rise noticeably for a time," Commerzbank said in a note.

The incident makes a significant fall in gold prices less likely in the short-term, Standard Bank said. Yet the tension in Ukraine is unlikely to prevent a decline in longer-term prices, according to some analysts.

"While much of gold's near-term price performance will depend on how the [Ukraine] situation unfolds, the longer-term macro, investor, and physical demand trends remain intact, and we think gold will eventually realize downside risks," Barclays Capital said in a report.

Investment in gold ETFs has been weak in recent days, Commerzbank added, with the SPDR Gold Trust, the world's largest ETF, recording outflows of nearly 3t on Thursday.