Gold rose to a near two-month high on Monday, as escalating clashes between Israel and Iran over the weekend stoked fears of a wider regional conflict, prompting investors to turn to safe-haven assets.

Spot gold was little changed at $3,428.89 an ounce, at 0508 GMT, after hitting its highest since April 22 earlier in the session.

U.S. gold futures fell 0.1% to $3,448.10.

"The compounding political risk premium that has risen due to the current Iran-Israel conflict has boosted safe-haven demand for gold," said Kelvin Wong, senior market analyst, Asia Pacific at OANDA.

"Currently, prices have clearly broken through the $3,400 level and the near-term uptrend is still intact. We see resistance at $3,500 with a possibility of a fresh high above the $3,500 level."

Israel and Iran launched fresh attacks on Sunday, killing and wounding civilians and raising fears of a wider regional conflict, with both militaries urging civilians on opposing sides to take precautions against further attacks.

US President Donald Trump said he hoped Israel and Iran could broker a deal but said sometimes countries have to fight first.

Gold is considered a safe haven during times of geopolitical and economic uncertainty.

Investors will be looking ahead to a number of central bank monetary policy decisions this week, with the spotlight on the US Federal Reserve on Wednesday.

The US central bank is widely expected to keep interest rates steady, with markets looking for signs of a potential rate cut in the coming months.

Futures markets show expectations for two more rate cuts by the end of the year, possibly starting in September, supported by weak inflation data last week.

Elsewhere, spot silver fell 0.1% to $36.28 an ounce, platinum rose 0.4% to $1,233.12, while palladium rose 1.4% to $1,041.85. (alg)

Source: Reuters