(Adds comments, details; updates prices)
* Gold earlier hit a near seven-year peak at $1,610.90
* U.S. President Trump to make statement on Wednesday
* Palladium reaches record high of $2,101
By Diptendu Lahiri
Jan 8 (Reuters) - Gold surged past the $1,600 level for the
first time in nearly seven years earlier on Wednesday after Iran
carried out retaliatory attacks against U.S. forces in Iraq, but
the metal pared gains as investors awaited reaction from the
White House.
Spot gold XAU= rose 0.4% to $1,579.33 per ounce at 1246
GMT, having earlier risen as much as 2.4% to its highest since
March 2013 to $1,610.90. U.S. gold futures GCcv1 rose 0.4% to
$1,580.70 per ounce.
"Gold is paring some gains right now as the retaliation was
not seen as aggressive as the markets thought it would be and
investors are booking profit for that reason," Saxo Bank analyst
Ole Hansen said.
"How gold will move from here is pinned on what U.S.
President Donald Trump says when America wakes up," Hansen
added. He said at the end of this day gold would either be back
at $1,600 levels or be heading down to $1,550.
Iranian state television said that at least 80 people were
killed in attacks involving 15 missiles Tehran launched on U.S.
targets in Iraq on Wednesday morning. The move by Iran came hours after the funeral of Tehran's
top military commander Qassem Soleimani, whose killing in a U.S.
drone strike last week intensified fears of a war in the Middle
East.
U.S. President Trump said in a tweet late on Tuesday that
"All is well!", and that he would make a statement on Wednesday
morning. Iranian Foreign Minister Mohammad Javad Zarif also tweeted
that Iran was not seeking escalation or war but would defend
itself against any aggression, leading to some pull-back in gold
prices. The metal, considered a safe investment in times of
political and economic uncertainties, was still supported as
fears of a military lockdown in the Middle East remained.
Gold was also supported by a dip in equities markets.
MKTS/GLOB
The metal's 14-day relative strength index (RSI) was around
88. An RSI above 70 indicates a commodity is overbought.
Elsewhere, palladium XPD= rose 2.2% to $2,097.24 per
ounce, after hitting another all-time peak of $2,101 an ounce on
a sustained supply deficit.
"Palladium fundamentals remain quite strong and (the metal)
faces significant upside risks," UBS strategist Joni Teves said
in a note. "Tight market conditions are well-reflected in record
spot prices and persistent backwardation in forwards."
Silver XAG= was up 0.1% at $18.41 per ounce, after earlier
hitting its highest since early September at $18.85, while
platinum XPT= was flat at $970.85 per ounce.
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Spot gold at 7 year peak https://tmsnrt.rs/2QxP6mz
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