Singapore, July 17 (QNA) - Gold is headed for its biggest weekly loss in six weeks as escalating tensions between the United States and Iran and higher oil prices fuel inflation concerns and strengthen expectations of US interest rate increase.

Spot gold rose 0.5 percent to USD 3,988.20 an ounce during Asian trading after earlier falling to its lowest level since July 1. US gold futures for August settled at USD 3,992 an ounce.

Despite Friday's rebound, gold has declined 3.2 percent so far this week, marking its steepest weekly drop since early June. The losses outweighed support from weaker-than-expected US inflation data for June.

Gold, which does not generate interest income, tends to come under pressure when interest rates rise, as investors shift toward higher-yielding assets.

Among other precious metals, spot silver fell 0.5 percent to USD 55.22 an ounce, platinum declined 0.7 percent to USD 1,605.62, and palladium slipped 0.4 percent to USD 1,244.86. All three metals were on track to post weekly losses. (QNA)