Gold prices rose over 1 per cent on Wednesday, rebounding from a more than one-week low hit in the previous session, as a widening Middle East conflict sent global markets tumbling and supported safe-haven demand.

Spot gold gained 1.4pc to $5,157.30 per ounce as of 04:53 GMT.

US gold futures for April delivery added 0.8pc to $5,165.80.

On Tuesday, bullion fell more than 4pc to its lowest since February 20, weighed by a firmer dollar and dimming rate-cut prospects as inflation concerns were intensified by fears of a prolonged war.

Gold could shrug off the previous session’s selloff over the coming days as the metal has swayed to its own narrative and has been resilient despite whatever the dollar and yields have been doing since the beginning of last year, said Ilya Spivak, head of global macro at Tastylive.

Oil and gas prices surged as the US-Israeli war on Iran halted energy exports from the Middle East, with Tehran attacking ships and energy facilities, closing navigation in the Gulf, and forcing production stoppages from Qatar to Iraq.

“Higher oil prices as a result of escalating geopolitical tensions in Iran added to inflationary concerns and complicated the outlook for monetary easing,” said Christopher Wong, a strategist at OCBC.

“The underlying fundamentals (for gold) have not materially shifted. Structural drivers such as geopolitical uncertainty, policy unpredictability, and portfolio diversification needs remain intact,” Wong added.

Investors expect the US Federal Reserve to hold rates at the end of its next two-day meeting on March 18, according to the CME Group’s FedWatch tool.

Spot silver advanced 3.1pc to $84.61 per ounce on Wednesday, after falling more than 8% in the last session. Spot platinum added 2.1pc to $2,126.50 per ounce, while palladium gained 1.6pc to $1,673.38.