LONDON, Dec 29: Gold edged higher on the last working day of the year to trade just below a three-week high, and was likely to extend gains in 2007, dealers said on Friday. Lingering worries over Iran's nuclear ambitions and a weakness in the dollar against the euro kept market sentiment positive, they said.

Having broken through key chart levels at $630 (an ounce), further gains could be in store for gold should it be able to hold above $630 and position for a break higher in the New Year, Standard Bank said in a daily report.

Gold is expected to close the year nearly 23 per cent above its last price in 2005, but prices are about 13 per cent lower than the 26-year high of $730 an ounce set in May.

Traders were watching whether the metal could break through $640 for the first time since Dec. 6.

Growing uncertainty in Iran was drawing safe-haven buying, while the perception was growing that the current uptrend in gold would continue for a while, dealers said.

Gold usually rises on geopolitical tension as precious metals are seen as safe-haven investments. In other precious metals, platinum and palladium prices were unchanged at $1,115/1,20 and ounce and $322/327 respectively. Silver inched up to $12.86/12.93 an ounce from $12.83/12.90 late in New York.—Reuters