Gold at highest since May 1 on political uncertainty, dollar

London: Gold hit its highest in nearly four weeks on Friday as political uncertainty led investors to shun riskier assets in favour of bullion.

"We have had the political noise coming from Trump and the US administration and there is a certain element of uncertainty in the markets in general, which is supporting gold. Equities are also down," analyst Carsten Menke at Julius Baer in Zurich said.

Leaders of the world`s rich nations face difficult talks with Donald Trump at a G7 summit in Sicily on Friday after the US president lambasted NATO allies and condemned German trade policies a day earlier.

Gold is used as an alternative investment during times of political and financial uncertainty.

Spot gold had gained 1 percent to $1,267.74 per ounce by 1415 GMT, the highest since May 1. US gold futures gained 0.9 percent to $1,267.40 an ounce.

Menke expects gold to remain rangebound with a price target of $1,200 in three months.

"The headwinds are coming from US monetary policy. We do expect a rate hike in June and we see the dollar strengthening again. On the upside, there`s a lot of uncertainty, which keeps people from selling gold and maybe causing a little bit of buying."

Data on Friday showed US gross domestic product increased at a 1.2 percent annual rate in the first quarter instead of the 0.7 percent pace reported last month, supporting the dollar.

Among other precious metals, spot platinum climbed 1.6 percent to $961.24, its highest in a month.

Head of Technical Analysis Stéphanie Aymes at Societe Generale said a bullish formation on the charts means platinum is expected to head towards $991.

"Platinum has been tracing a pattern similar to a triangle and more importantly a probable double bottom at $900/$890

levels," she said in a note.

Platinum is up 2.8 percent for the week, the biggest weekly rise since early January.

Spot silver rose 1.4 percent to $17.36 and was on track to gain 3.3 percent this week, its biggest weekly rise since early January.

Palladium rose 1 percent to $779 and has added 1.8 percent this week, its first weekly gain this month.