Gold falls amid Syria tension

MOST precious metals fall, with gold dropping 0.1 per cent, as a stronger US dollar dampens investor appetite for safe-haven assts amid fears over Syria.

GOLD prices have inched lower as a stronger US dollar damped investor appetite for the safe-haven asset despite mounting concerns about possible US and allied military action against Syria.

The most actively traded contract, for December delivery, on Wednesday fell $US1.40, or 0.1 per cent, to settle at $US1,418.80 a troy ounce on the Comex division of the New York Mercantile Exchange.

The US dollar advanced against the euro, tarnishing some of gold's allure to foreign buyers. Gold futures are traded in US dollars and become more expensive for traders who use other currencies when the greenback strengthens, deterring these buyers from the market.

Still, "the pullback will be limited to about $1,390 because there's a lot of people who feel that they've missed the boat on gold," said Bob Haberkorn, senior commodities broker with RJO Futures.

Gold prices have rallied 17 per cent since hitting a settlement low of $US1,211.60 in June.

Earlier in the day, gold prices had touched a three-month intraday high of $US1,434 an ounce amid rising geopolitical tensions over Syria's alleged use of chemical weapons on civilians.

"The situation in the Middle East, and what could be on the horizon there, could see people stick more money into precious metals," Haberkorn added.

The UK said it would submit a United Nations Security Council resolution on Wednesday asking the body for authority to protect Syrian civilians.

"Tensions in Syria are obviously creating a safe-haven premium in the precious metals market," said Dave Meger, director of metals trading with Vision Financial Markets.

Gold tends to keep its value better than other assets during periods of geopolitical upheaval, and investors often flock to the hard asset as a means of fireproofing their portfolios.

Settlements (ranges include open-outcry and electronic trading):

London PM Gold Fix: $1,419.50; previous PM $1,419.25

Dec gold $1,418.80, down $1.40; Range $1,413.20-$1,434.00

Sep silver $24.380, down 27.1 cents; Range $24.220-$25.120

Oct platinum $1,540.10, up $8.00; Range $1,516.00-$1,546.60

Sep palladium $746.05, down $3.10; Range $734.90-$749.85