Gold races to near 7-year peak after Iran strike on US forces roils markets

Gold soared as much as 2% on Wednesday to vault over the $1,600 ceiling for the first time in nearly seven years, as investors flocked to safe havens, after Iran launched retaliatory missile strikes against US forces in Iraq.

Spot gold jumped 0.8% to $1,585.80 per ounce by 0250 GMT.

Prices hit their highest since March 2013 at $1,610.90 earlier in the session.

US gold futures rallied 1% to $1,589.30. Iran launched a missile attack on US-led forces in Iraq in the early hours of Wednesday.

"Fears of uncertainty and further escalation in this military confrontation is dragging up gold prices," said Margaret Yang Yan, a market analyst at CMC Markets.

"This (Iran attacks) is definitely fuelling demand for safe havens, not just gold but also yen, while equities are being heavily sold off."

Gold is considered a safe investment in times of political and economic turmoil.

CMC Markets' Yan said that technically, "gold is heavily overbought," adding that a pullback could occur if Trump resolves the issue diplomatically without "triggering a full-blown war."

The metal's 14-day relative strength index (RSI) was around 88. An RSI above 70 indicates a commodity is overbought.

Spot gold may break a resistance at $1,614 per ounce and rise towards the next resistance at $1,639, according to Reuters technical analyst Wang Tao.

Among other precious metals, palladium hit a fresh all-time peak of $2,056.01 an ounce earlier in the session on sustained supply deficit, and was last down 0.3% to $2,045.08. The autocatalyst metal touched a fresh record high for the third consecutive session.

Silver rose 0.8% to $18.53 per ounce, after hitting its highest since early September at $18.85, while platinum edged 0.1% lower to $970.25.