LONDON – Gold prices steadied above $1 300/oz on Monday, underpinned by concerns that tensions in Ukraine could escalate, while platinum outperformed as a strike across the South African platinum belt entered a third month.

The stand-off between Russia and the West over Ukraine helped gold rebound towards the end of last week from the two-and-a-half-month low it hit on Thursday at $1 268.24/oz.

Spot gold was at $1 301.80/oz at 1146 GMT, little changed from $1 302.84/oz late on Friday, while US gold futures for June delivery were down $0.40 cents at $1 300.70/oz.

"The market is nearly flat, consolidating after Friday's gains, trading mostly on Ukraine headlines," VTB Capital analyst Andrey Kryuchenkov said. "The rebound at the end of last week was driven mostly by safe-haven buyers and some investor buying on new April lows. For now, all eyes will be on Ukraine."

US President Barack Obama announced new sanctions against some Russians on Monday aimed at stopping President Vladimir Putin from fomenting rebellion in eastern Ukraine but said he was holding broader measures against Russia's economy "in reserve".

Pro-Russian rebels paraded European monitors they are holding in eastern Ukraine on Sunday, freeing one but saying they had no plans to release another seven.

Tensions over Ukraine weighed on world stocks on Monday, keeping them near ten-day lows, though European bourses benefited from well-received corporate results and merger speculation. The dollar index edged lower, also supporting gold.

CHINESE IMPORTS FROM HONG KONG SLOW

In the physical market, premiums in top buyer China were at about $2/oz. Hong Kong customs office data showed China bought less gold in March from Hong Kong than in the previous month, although the drop was smaller than expected, analysts said.

Net gold flows into China from Hong Kong fell to 85.128 t from 112.314 tonnes in February, the data showed.

Premiums in India, the second biggest gold consumer, jumped to $110/oz, their highest level in more than two-and-a-half months owing to short supplies.

Among other precious metals, spot platinum outperformed to rise 0.7%  to $1 425/oz, while spot palladium was up 0.1% at $807/oz.

Producers said they would take their latest wage offer directly to employees after marathon wage talks to end the 13-week strike collapsed on Thursday.

"This raises the possibility that there will be no collective agreement and that the producers will have to settle individually with some 70 000 workers, setting a unique precedent and leaving a question mark over future labour relations," Mitsubishi precious metals strategist Jonathan Butler said in a report.

"Any non-collective agreement also heightens the probability that there will be a piecemeal return to work, with the threat of violence and intimidation."

Police used water cannon and stun grenades to disperse rioters in South Africa's strike-hit platinum belt on Sunday after a government minister was attacked by rock-throwing protesters while campaigning for the May 7 election.

Silver was down 0.2% at $19.58/oz.