PRECIOUS-Gold soars as Middle East tensions brew 'perfect storm'

(Updates prices, analyst comments)
* Palladium hits all-time high of $2,031/oz
* Gold eyes $1,600/oz- analyst
* World stocks slump, erase new year's gains

By Karthika Suresh Namboothiri
Jan 6 (Reuters) - Gold prices surged on Monday as the U.S.
killing of a top Iranian military commander triggered fears of a
wider conflict in the Middle East, prompting a rush to the
metal's safety, while palladium soared past $2,000 an ounce for
the first time.
Spot gold XAU= was up 1.1% at $1,567.80 per ounce as of
10:29 a.m. ET (1529 GMT), after rising to $1,579.72 earlier in
the session, its highest since April 2013.
U.S. gold futures GCcv1 gained 1% to $1,568.40 per ounce.
"The markets are nervous about what comes next between the
United States and Iran; there are political risks and there is
safe haven buying in gold," said Bob Haberkorn, senior market
strategist at RJO Futures.
"The equities are lower, and this is a perfect storm for
higher gold between now and until we get some clarity on the
situation."
Iraq's parliament called on Sunday for U.S. and other
foreign troops to leave, while Iran lambasted U.S. President
Donald Trump after he threatened to hit 52 Iranian sites,
including targets important to Iranian culture, if Tehran were
to retaliate. The conflict took a hit at risk appetite, sending world
stocks .MIWD00000PUS down 0.3%, erasing all its new year's
gains in its biggest two-day fall since early December.
MKTS/GLOB
The dollar index was 0.2% lower against six other major
currencies, making gold cheaper to buy. .DXY . USD/
"Gold flew through last year's highs in early trade and ...
safe havens are back in vogue and the yellow metal is leading
the way," said OANDA analyst Craig Erlam in a note.
Elsewhere, U.S. Federal Reserve policymakers agreed that
interest rates were likely to stay on hold for "a time," minutes
of the Fed's Dec. 10-11 policy meeting, released on Friday,
showed. Gold is highly sensitive to interest rates, as higher rates
lift the opportunity cost of holding non-yielding bullion.
Palladium XPD= was up nearly 2% to $2,025.22 an ounce,
after hitting an all-time high of $2,031. The industrial metal
added 53.93% in 2019, and is expected to remain in high demand
this year.
"It (palladium) seems to be unstoppable. Many market players
are of the opinion that the market will remain severely tight,
and that's the main driving force for prices," Commerzbank
analyst Daniel Briesemann said.
Silver XAG= gained 0.7% to $18.16, having earlier hit its
highest in more than three months at $18.50.
Platinum XPT= eased 0.9% to $971.82.