Gold rises on ME tensions, dollar drop

Gold prices rose on Wednesday, to near record-high levels as risks of the Middle East conflict spreading to other regions brought safe-haven flows into bullion, alongside short-term support from falling US dollar, reports Reuters.

Spot gold rose 0.2 per cent to $2,388.56 per ounce, as of 1138 GMT, nearing its all-time high of $2,431.29. US gold futures fell 0.1 per cent to $2,404.90.

"The precious metal is heavily overbought from a technical perspective...but bulls are drawing strength from the overall uncertainty across markets with geopolitics overshadowing data and monetary policy expectations," said FXTM senior research analyst Lukman Otunuga.

Market participants are keeping a close eye on developments in the Middle East, particularly on Israel's response to Iran's attacks, while US and its allies planned fresh sanctions against Iran.

Spot silver rose 1.4 per cent to $28.47 per ounce. Spot platinum rose 0.1 per cent to $957.58 and palladium was up 1.2 per cent at $1,026.27.