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Gold set for fifth straight weekly gain

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Israel has attacked Iran, sources say

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Analyst says gold is a geopolitics trade at the moment

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Platinum and palladium on track for weekly losses

(Recasts, adds analyst comment and updates prices, as of 0429

GMT)

By Sherin Elizabeth Varghese

April 19 (Reuters) - Gold prices rose on Friday as risk

aversion swept across financial markets following media reports

on explosions in Iran, prompting fears of a wider regional

conflict and increasing bullion's safe-haven appeal.

Spot gold rose 0.3% at $2,386.05 per ounce, as of

0429 GMT, after briefly jumping as high as $2,417.59 earlier in

the session, not far from an all-time high of $2,431.29 hit last

Friday. Bullion was set for a fifth straight weekly rise and has

risen about 2% so far this week.

U.S. gold futures rose 0.1% at $2,401.20.

The news of Israel's attacks on Iran today "is driving gold

price attention on the Middle East which has been the sole thing

keeping the gold price moving higher for weeks now. Market is

now waiting for more information about the nature of the attack,

and what the response would be," said Kyle Rodda, a financial

market analyst at Capital.com.

"Gold is not a monetary policy trade at the moment, it's a

geopolitics trade," Rodda said.

Israel has attacked Iran, three people familiar with the

matter said, as Iranian state media reported early on Friday

that its forces had destroyed drones, days after Iran launched a

retaliatory drone strike on Israel.

Eventually, even if geopolitical risks subside, "Chinese

gold reserve accumulation acts as the major catalyst. That is a

process that seems to have scope for continuity, favouring

gold's upside bias," Ilya Spivak, head of global macro at

Tastylive said.

Meanwhile, Federal Reserve policymakers have gathered around

the idea of keeping borrowing costs where they are until perhaps

well into the year, given the slow and bumpy progress on

inflation and a still-strong U.S. economy.

Higher interest rates increase the opportunity cost of

holding non-yielding bullion.

Amongst other precious metals, spot silver rose

0.2% to $28.28 per ounce, and was set for a weekly gain.

Spot platinum rose 0.6% at $938.39, and palladium

was steady at $1,023.09. Both sister metals were headed

for a weekly decline.