Gold rose on Tuesday as rising geopolitical uncertainty stemming from the Israel-Iran row and U.S. President Donald Trump's call to evacuate Tehran prompted investors to seek safe-haven assets.
Spot gold was up 0.4% at $3,396.67 an ounce, by 0239 GMT, after falling more than 1% on Monday.
U.S. gold futures were steady at $3,416.30.
"Market sentiment continues to fluctuate between escalation and de-escalation regarding events in the Middle East, and it is this shift in sentiment back and forth that is driving gold prices either side of the $3,400 level," said Tim Waterer, chief market analyst at KCM Trade.
A fifth straight day of fighting between Israel and Iran saw Israel attack Iran's state broadcaster on Monday, while the head of the U.N. nuclear watchdog reported severe damage to Iran's largest uranium enrichment facility.
Trump, who returned early from a G7 summit in Canada on Monday night, urged Iranians to evacuate Tehran, citing the country's rejection of a deal to curb its development of nuclear weapons.
Reports also suggested that Trump had asked the national security council to remain in the situation room.
Gold is considered a safe haven asset during times of geopolitical and economic uncertainty.
"There is enough uncertainty prevailing around the tariff war and the actual war to support gold prices and keep them in view of a potential return to $3,500," Waterer said.
Investors are also looking ahead to the US Federal Reserve meeting scheduled to begin later in the day, with a decision due on Wednesday.
The Fed is widely expected to keep interest rates steady but focus will once again be on the path charted by Chairman Jerome Powell for future rate cuts. Traders are currently pricing in two rate cuts by the end of the year.
Elsewhere, spot silver rose 0.3% to $36.41 an ounce, platinum rose 0.6% to $1,251.20, while palladium edged up 0.2% to $1,031.68. (alg)
Source: Reuters
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