Gold gains on jitters over probe into Trump's campaign

By Eric Onstad

LONDON (Reuters) - Gold rose on Friday on the back of a softer dollar after a report about a U.S. probe requesting more documents linked to possible Russian interference in the 2016 election.

"The plot seems to thicken day by day and what that does is make less likely political compromise over tax cuts and fiscal stimulus," said Jonathan Butler, commodities analyst at Mitsubishi in London.

Investigators issued a subpoena last month for documents containing specified Russian keywords from more than a dozen officials, the Wall Street Journal reported.

That helped push the dollar index against a basket of six major currencies down 0.2 percent.

"There's also a lot of concern that the equity market rally is possibly becoming a little exhausted for now, and that should be supportive of gold in the short term," Butler added.

Spot gold was up 0.4 percent at $1,283.36 per ounce at 1115 GMT. It is up about 0.5 percent for the week, poised to post a second straight weekly gain.

U.S. gold futures for December delivery rose 0.4 percent to $1,283.30.

"Gold prices will continue a sideways drift in the coming months as rising nominal interest rates in the U.S. keep a lid on investment demand," BMI Research said in a note.

"Prices will grind moderately higher in the longer term as developed market inflation rebounds."

Spot gold is biased to rise above a range of $1,270-$1,286 per ounce, and gain further towards $1,298, according to Reuters technicals analyst Wang Tao.

In other precious metals, silver added 0.1 percent to $17.09 an ounce, lagging gold this year with gains of 7 percent versus gold's 10 percent.

"There hasn't been an intrinsic silver fundamental story for some time that market participants can trade on the back of," UBS precious metals strategist Joni Teves said in a note.

"This has meant that interest in silver has eased in recent years and that lingering participation tends to be very much driven by short-term speculative trading interest."

Platinum rose 0.6 percent to $936.60 and palladium gained 0.8 percent to $995.

For the week, silver has risen 1.1 percent, in what could be its best week in five. Platinum is up 0.9 pct, heading for a third straight weekly rise, while palladium is almost unchanged.

(Additional reporting by Vijaykumar Vedala and Arpan Varghese in Bengaluru; Editing by Mark Potter)