LONDON  - Oil and gold prices won some support this week from Western sanctions imposed on Russia and owing to crises gripping Iraq and Gaza, traders said.

US jets struck jihadist positions in northern Iraq on Friday, a potential turning point in a two-month crisis Washington said was threatening to lead to genocide and to expose US assets.

President Barack Obama’s order for the first air strikes on Iraq since he put an end to US occupation in 2011 came after Islamic State (IS) militants made massive gains on the ground, seizing a dam and forcing a mass exodus of religious minorities.

Over in Moscow this week, Russia retaliated against tough new Western sanctions, banning most food imports from the United States and the European Union and threatening to block flights over its airspace.

The tit-for-tat moves further heighten tensions between Russia and the West over the conflict in Ukraine, where heavy shelling was reported in the rebel-held eastern city of Donetsk on Thursday.

Elsewhere, deadly hostilities engulfed Gaza once again as a 10-year-old boy was killed on Friday and Israeli warplanes struck targets in retaliation for dozens of Palestinian cross-border rocket attacks.

OIL: Crude oil prices rose slightly over the week as geopolitical strains helped to offset an ample supply situation, traders said. Prices rebounded from multi-month lows as the US launched air strikes on Iraq, triggering fresh worries over supply disruptions in the crude-rich country.  Markets recovered at the end of a week during which crude futures have been pressured by a firmer dollar and solid supplies, according to traders. New York-traded prices hit a six-month low point at $96.55 a barrel on Thursday. On Tuesday, Brent North Sea crude reached $104.07 — the lowest level for four months. CMC Markets analyst Desmond Chua said the developments in Iraq could add “significant risk premium to oil prices” as dealers worry about potential supply disruptions.

“The announcement certainly edges up the geopolitical concerns about Iraq and the Middle East region, and comes as a bit of a surprise to investors,” Chua told AFP.

Singapore-based group Phillip Futures said fears about immediate disruptions “may be overplayed” as air strikes should target only northern Iraq, where oil fields are “relatively small and account for a small percentage of total output”.  Islamic State insurgents now control large swathes of Iraq’s north and west. The sweeping offensive began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan. Iraq’s oil ministry on July 24 said crude exports totalled 2.42 million barrels per day (bpd) in June, falling far short of a budgeted projection of 3.4 million bpd.

As the number-two producer in the OPEC cartel, Iraq’s 11 percent of proven world reserves plays a key role on world markets, particularly as violence has already disrupted oil exports from Syria and Libya. “As of late, crude contracts have weakened in response to abundance in European and American supply. However, as political tension in Iraq and Libya escalates, supply risk prevails, which is likely to offer support to crude contracts going forward,” said Dorian Lucas, an analyst at energy consultancy Inenco.

The OPEC oil cartel on Friday trimmed its 2014 forecast for global oil demand growth after weaker-than-expected economic growth in rich countries in the second quarter and a “fragile” worldwide recovery. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September edged up to $104.89 a barrel from $104.85 one week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for September stood at $97.42 a barrel compared with $97.30 for the August contract a week earlier. - Gold shines -PRECIOUS METALS: Gold prices won support as traders seeking cover moved to buy up the safe-haven investment.

“The numerous sources of geopolitical crisis should continue to lend support to gold, at least in the short run,” analysts at Commerzbank said in a note to clients.

Gold futures hit a three-week high at $1,322.92 an ounce on Friday. Sister metal silver also rebounded from a seven-week low on Wednesday, although not by enough to finish higher over the week.

 By Friday on the London Bullion Market, the price of gold rose to $1,309.75 an ounce from $1,291.25 a week earlier.

Silver fell to $20.13 an ounce from $20.34. On the London Platinum and Palladium Market, platinum climbed to $1,475 an ounce from $1,462.

Palladium dropped to $857 an ounce from $871. BASE METALS: Prices came under pressure from a firmer dollar, despite a euro fightback on Friday.  “Metal prices are under pressure across the board,” noted analysts at Commerzbank.

A stronger dollar which makes commodities priced in the US unit more expensive to holders of rival currencies, denting demand. The single currency had slumped to $1.3333 on Wednesday, its lowest level for nine months, before recovering. The euro was hit this week in part by renewed eurozone debt worries after a state bailout of Portuguese bank BES.

The European Central Bank held its key interest rate unchanged at 0.15 percent at its regular policy meeting on Thursday, two months after easing monetary conditions in the 18-country euro area.

Speaking after the decision, president Mario Draghi warned that the eurozone recovery “remains weak, fragile and uneven” and recent data showed “a slowing down in the growth momentum”. By Friday on the London Metal Exchange, copper for delivery in three months fell to $6,982 a tonne from $7,103 a week earlier. Three-month aluminium increased to $2,021.25 a tonne from $1,987. Three-month lead grew to $2,237.50 a tonne from $2,223.  Three-month tin slipped to $22,367 a tonne from $22,480. Three-month nickel gained to $18,584 a tonne from $18,500. Three-month zinc dropped to $2,295 a tonne from $2,353.50. - Cocoa in demand -COCOA: Robust demand kept futures hovering near highs. “Cocoa prices continue to hold elevated levels as strong cocoa butter demand is keeping processors busy,” said Citi bank analyst Sterling Smith. By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December stood at £2,009 a tonne compared with £2,019 for the September contract a week earlier. On the ICE Futures US exchange, cocoa for December traded at $3,222 a tonne compared with $3,196 for the September contract a week earlier.

COFFEE: Prices retreated on profit-taking after recently striking multi-month peaks over concerns of tighter supplies in main producer Brazil. “The potential for big production losses in Brazil this year are real, and traders are starting to worry about production next year as well as some... rains hit coffee areas in the south,” said Price Futures Group analyst Jack Scoville.  Rains in the normally dry month of August have sparked worries that early flowering could harm bean production for the next crop.  By Friday on ICE Futures US, Arabica for delivery in September fell to 191.55 US cents a pound from 196.90 cents a week earlier. On LIFFE, Robusta for September dropped to $1,937 a tonne from $2,114 a week earlier.

SUGAR: The market remained weighed down by high supplies of the sweet commodity. By Friday on LIFFE, the price of a tonne of white sugar for delivery in October fell to $432.70 from $436.50 a week earlier. On ICE Futures US, the price of unrefined sugar for October slid to 16.13 US cents a pound from 16.41 US cents a week earlier.

RUBBER: Prices slipped lower largely on falling demand by major importing countries, traders said. The Malaysian Rubber Board’s benchmark SMR20 ended at 168.60 US cent a kilo, down from 170.10 cents a week earlier.