Silver should also move higher after good gains in New York but platinum was seen struggling to hold onto the $350.00 level which needed to be breached conclusively for the white metal to post more gains.

Dealers said gold was boosted by short-covering in New York on Thursday as investment funds bought on fears that the U.S. And its allies will launch military action against Iraq.

A German dealer said gold more likely moved higher overnight and in early Europe ahead of the Comex options expiry later on Friday in New York.

Most of the open interest was around a $300.00 strike price which could have helped gold move above $297.00.

"It is a nice try to get to the strike points today and I expect you may see an attempt to get to $300.00," the dealer said.

Asian traders said on Friday the gold market in the region was quiet but alert fora US military strike against Iraq, which would move prices briefly higher.

European dealers said the latest crisis over Iraq only had a slight influence on the bullion market.

"It is only a slight influence. It is more spoken about than... a real impact," one dealer said.

By 0830 GMT, gold was quoted at $297.00/$297.50, 50 cents up on Thursday's New York close.