Gold prices inched up on Wednesday on a weaker US dollar and lower treasury yields, but expectations of a US rate rise next week kept a lid on gains. Spot gold was up 0.3 percent at $1,298.98 per ounce at 0635 GMT.
US gold futures for August delivery were 0.1 percent higher at $1,303.10 per ounce.
"Geopolitical tensions are providing (only) limited support to gold prices ... a recovery in the US economy could lead the central bank to have more rate hikes this year, and hence, the upward momentum in gold is not that strong, said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
"$1,300 should be the level around which the gold price is going to move at this moment," To said.
"Investor interest is mixed towards gold in the current environment, with geopolitical tensions attracting reduced flows and limiting the downside risk rather than propelling prices higher," Standard Chartered said in a note on Tuesday.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 836.13 tonnes on Tuesday, the lowest since mid-March.
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