HONG KONG, Feb 4 — Gold prices bounced back to near US$5,100 (RM20,035) today on safe-haven demand as renewed geopolitical tensions between the US and Iran added to the yellow metal’s appeal a day after it posted its best day in over 17 years.

Spot gold shot up 2.8 per cent to US$5,076.01 per ounce as of 0655 GMT, after surging 5.9 per cent yesterday, its biggest daily gain since November 2008. Bullion scaled a record high of US$5,594.82 last Thursday.

US gold futures for April delivery climbed 3.3 per cent to US$5,097.20 per ounce.

The US military yesterday shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said.

Gold is bouncing back from a low of US$4,403.24 touched on Monday after its biggest two-day sell off in decades.

“After such a sharp rally, a correction was expected, it was not surprising and with gold coming back up, the fundamentals have not changed much,” ANZ analyst Soni Kumari said, adding that the geopolitical and economic backdrop remained mostly unchanged.

Goldman Sachs today said that it saw significant upside risk to its US$5,400 year-end forecast for gold on central banks maintaining their recent pace of accumulation alongside private investors stepping up gold ETF purchases.

“Going ahead ... we are expecting the same US$5,600 levels (for gold) by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is US$6,000/oz,” said Jigar Trivedi, a senior research analyst at IndusInd Securities.

Spot silver rose 5 per cent to US$89.38 an ounce. It touched a record high of US$121.64 today but fell to a month-low at US$71.33 on Monday having registered a record single-session price wipe-out of 27 per cent on Friday.

Markets now await ADP private payroll data for more cues on the Federal Reserve’s policy path even as a partial US government shutdown has delayed the closely watched employment report for January.

Spot platinum added 4.2 per cent to US$2,302.56 per ounce, while palladium gained 3.5 per cent to US$1,794.15. — Reuters