Gold rises on political frictions, weaker dollar

Gold prices gained from last session's fall on lingering political tensions and a weaker dollar, but were still near their lowest in over a week as equities were set to extend their gains on economic optimism.

Spot gold rose 0.4% to $1,703.67 per ounce, as of 0212 GMT. On Wednesday, it fell 1.7% to reach its lowest since May 27.

U.S. gold futures were flat at $1,704.90. The European Central Bank is certain to give more stimulus, with the only question being timing- whether later on Thursday or holding out until July. * More stimulus and lower interest rates tend to benefit gold, which is often seen as a hedge against inflation and currency debasement. The dollar index has fallen about 1% this week, making gold cheaper for holders of other currencies.

The U.S. is expected to impose restrictions on at least four additional state-run Chinese media outlets, sources said on Wednesday. U.S. President Donald Trump's administration on Wednesday barred Chinese passenger carriers from flying to the United States starting on June 16. Asian stocks were poised to extend gains on stimulus measures.

U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen, data showed. Indicating economic recovery in China too, the country's services sector returned to growth last month for the first time since January, although job losses continued, a survey showed on Wednesday.

Banks should prepare for the possibility of a no-deal Brexit, the Bank of England said on Wednesday. * SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings, rose 0.4% to 1,133.37 tonnes on Wednesday. Palladium rose 0.6% to $1,961.17 per ounce and platinum rose 0.7% to $831.58, while silver was down 0.4% to $17.59.