Gold edges higher on safe-haven demand as Middle East conflict intensifies

Gold prices edged higher on Thursday as ‌the widening Middle East conflict drove investors towards the safe-haven asset, while a rebound in the dollar limited gains.

Spot gold was up 0.4 percent at $5,153.11 per ounce, as of 0638 GMT. US gold futures ​for April delivery were up 0.5 percent at $5,161.30.

"I think this crisis is something that ​supports gold prices in the long run. But the uncertainty surrounding ⁠the war means we will continue to see heightened volatility until we see signs ​that we've reached peak escalation," said Kyle Rodda, a senior financial market analyst at ​Capital.com.

The dollar rebounded from the previous session's losses, making greenback-priced bullion expensive for holders of other currencies.
The war widened sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka, killing ​at least 80 people, and NATO air defences destroyed an Iranian ballistic missile fired ​towards Turkey.

The escalation came as the son of Iran's slain supreme leader Ayatollah Ali Khamenei emerged as a ‌frontrunner ⁠to succeed him, suggesting Tehran was not about to buckle under pressure, five days after the US and Israel launched a military campaign that has killed hundreds and convulsed global markets.

Bullion, traditionally viewed as a safe-haven asset, has risen about 20 percent so far ​this year, notching successive ​record highs amid ⁠heightened global political and economic uncertainty.

Meanwhile, US President Donald Trump officially nominated former Federal Reserve Governor Kevin Warsh to be the US central ​bank's next chair, putting the president one step closer to ​installing an ⁠interest-rate-cut-friendly Fed chief.

Markets expect the Fed to keep rates steady on March 18, according to CME Group's FedWatch tool.

Investors now await the weekly US jobless claims data, due later in ⁠the day, ​and the US employment report for February on ​Friday.