Gold consolidates after hitting record high on West Asia tensions

Gold prices took a breather on Monday after hitting an all-time high in the previous session, as investors sought after safe-haven assets amid heightened conflict in the Middle East.

Spot gold was up 0.3% at $2,349.67 per ounce as of 1031 GMT. Prices hit a record high of $2,431.29 on Friday in anticipation of Iran's retaliatory attack.

U.S. gold futures lost 0.3% at $2,366.10.

Iran launched explosive drones and missiles at Israel late on Saturday in retaliation for a suspected Israeli attack on its consulate in Syria on April 1.

"The market had already priced in this well-flagged event last week, allowing it to consolidate after a very strong run-up," said Ole Hansen, head of commodity strategy at Saxo Bank.

"The appetite for gold has been extremely strong in recent weeks and now with that we have a small setback, that could potentially attract some fresh buying after the correction, as underlying concerns about geopolitics remain."

Bullion has gained nearly 14% so far this year, ignoring traditional headwinds such as a higher dollar and strong economic data out of the United States.

Despite recent U.S. economic data showing strong labor market and high inflation, Federal Reserve Bank of Boston President Susan Collins is eyeing a couple of interest rate cuts this year.

Lower interest rates reduce the opportunity cost of holding bullion.

Spot silver rose 1.7% to $28.34 per ounce after touching its highest level since early 2021 on Friday.

"Silver is set to outperform gold as investment flows surge amid record-high gold prices. We expect gold to trade near $2,500/oz and silver to move above $31/oz by the end of 2024," analysts at ANZ Research wrote in a note.

Platinum fell 0.6% at $970.15 and palladium lost 0.8% to $1,040.68.