By Asha Sistla
(Reuters) - Gold traded flat on Thursday but prices were set for a second consecutive weekly gain as the Ukraine crisis and broadening inflationary pressures lifted the safe-haven metal's appeal.
Spot gold was little changed at $1,974.28 per ounce, as of 0426 GMT. U.S. gold futures were down 0.4% at $1,977.60.
The metal has gained about 1.4% so far in the week. Most markets will be closed on Friday for a holiday.
"Political risk premium through the Ukraine war escalation is building again, which pushed all prices higher in general commodities and that's really creating that inflation environment," said Stephen Innes, managing partner at SPI Asset Management.
"On the counter side, the market doesn't know whether this is just a short-term phenomena, or the markets are sort of paring back a little bit of risk because of what Fed's Lael Brainer said was less hawkish."
Fed Governor Brainard said on Tuesday the U.S. central bank would conduct a series of rate hikes and begin reducing its bond holdings as soon as June to help bring down inflation that hit a four-decade high in March.
"Gold at this moment is trending and it's supported mainly by what we have heard from the Fed, the U.S. inflation (data)," said Brian Lan, managing director at dealer GoldSilver Central.
Meanwhile, U.S. President Joe Biden announced an additional $800 million in military assistance to Ukraine on Wednesday, ahead of a wider Russian assault expected in eastern Ukraine.
Non-yielding bullion is considered a safe store of value during uncertain times and a hedge against inflation.
The U.S. dollar index eased off May 2020 highs following a dip in Treasury yields, making gold more attractive for other currency holders. [USD/] [US/]
Spot silver was flat at $25.73 per ounce, platinum was unchanged at $986.27 and palladium rose 2.3% to $2,368.85.