Gold prices hover near record high amid growing geopolitical tensions

Gold prices edged higher on Tuesday, trading not too far away from a record high hit last week, as concerns over rising geopolitical tensions between Iran and Israel propped up demand for the safe-haven metal.

Spot gold was up 0.1 per cent at $2,385.35 per ounce, as of 0611 GMT, after hitting an all-time high of $2,431.29 on Friday. US gold futures rose 0.8 per cent at $2,401.90.

Gold has got another leg of support from the latest round of Middle East headlines, but it was gaining even before that with central bank purchases and rising inflation expectations also supporting the rally - meaning that gold is behaving like an inflationary hedge once more, City Index senior analyst Matt Simpson said.

"The fact we saw an intraday break above $2,400 quickly reverse suggests traders are keen to book profits, which in turn suggests we may be about to experience some sort of a shakeout at these highs."

Gold rose 1.6 per cent in the previous session despite data showing US retail sales increased more than expected in March.

Data out of the US has stirred questions on the prospects of rate cuts, with the market now betting on fewer than two quarter-point cuts by the year-end, from three cuts about a month ago. [FEDWATCH]

"The bullion complex has de-coupled from US rates and the US dollar, suggesting robust physical consumption drivers (eg, India/China imports, bar/coin), alt-fiat demand, geopolitical hedging, and central bank buying are supporting the market," Citi wrote in a note. [USD/][US/]

Citi projected gold prices to trade at $3,000 per ounce over the next 6-18 months.

Spot silver fell 0.7 per cent to $28.69 per ounce, platinum rose 0.7 per cent at $969.05 and palladium lost 0.8 per cent to $1,027.50.