Gold prices rise as Iran-Israel conflict fuels safe-haven demand

Gold prices rose on Monday as escalating Iran-Israel tensions boosted safe-haven demand, with markets closely monitoring developments in the region.

Spot gold gained 0.5per cent at $3,384.59 an ounce, as of 1245 a.m. EDT (1645 GMT). US gold futures was up 0.4per cent at $3,400.70.

"Prices are up partly because of political uncertainty following the US bombing of Iran," said Jeffrey Christian, managing partner of CPM Group.

The United States over the weekend launched multiple missile strikes against Iran targeting its nuclear sites, while President Donald Trump openly mused about overthrowing the Iranian government.

Axios, citing an Israeli official, reported on Monday that Iran had launched six missiles toward US bases in Qatar.

Israel's military bombed Evin prison in northern Tehran, a potent symbol of Iran's governing system, in what Israel called its most intense bombing yet of the Iranian capital.

Gold is traditionally seen as a hedge against inflation and a safe haven during times of uncertainty.

"We expect gold and silver prices to remain strong and to rise further as long as the political and economic problems continue and we don't see them ending anytime soon. Our expectation is that the price of gold could hit $3,500/oz within the next couple months," Christian added.

Gold hit its highest-ever mark on April 22 at $3,500.05.

Investors also await the US Personal Consumption Expenditures data due later this week.

Last week, the Federal Reserve left the US policy rate in its current 4.25per cent-4.50per cent range with policymakers hinting at possible rate cuts later this year.

Bullion, a non-yielding asset, tends to thrive when interest rates are low.

Spot silver was up 0.7per cent at $36.22 per ounce and platinum rose 1.5per cent to $1,284.08.

Palladium gained 2.5per cent to $1,070.47, reaching its highest level since June 11.