PRECIOUS-Gold extends gains as renewed U.S.-Iran tensions fuel safe-haven bid

By Noel John

Feb 4 (Reuters) - Gold rose further on Wednesday, after logging its biggest daily gain in 17 years in the previous session, as investors flocked to the safe-haven asset amid fresh geopolitical tensions between the U.S. and Iran.

Spot gold XAU= was up 2.4% at $5,057.50 per ounce, as of 0945 GMT, building on a 5.9% rise on Tuesday.

U.S. gold futures GCcv1 for April delivery climbed 3% to $5,080.90 per ounce.

"It is a confluence of risk factors that's really driving the demand. One, there is that central bank independence question, and two, there's all the geopolitical risk aspects," said WisdomTree commodities strategist Nitesh Shah.

The U.S. military said on Tuesday it shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea. The incident came as diplomats sought to arrange nuclear talks between Iran and the United States.

Meanwhile, U.S. President Donald Trump said on Monday that the investigation into Federal Reserve Chair Jerome Powell should be taken to the end, raising fresh concerns about the central bank's independence.

Gold is clawing back losses after sinking to $4,403.24 on Monday, extending losses from Friday, in the sharpest two‑day sell‑off in decades, sparked by Trump's announcement of Kevin Warsh as his pick to lead the Fed and compounded by CME margin hikes. The metal is currently up over 17% for the year.

"With the Fed still expected to cut further rates this year, this should allow gold to reach $6,200/oz later this year," said UBS analyst Giovanni Staunovo.

Non-yielding bullion tends to perform better in low-interest-rate environments.

Meanwhile, spot silver XAG= rose 4.5% to $88.90 an ounce on Wednesday. The white metal hit a month-low of $71.33 on Monday following a record high of $121.64 on Thursday last week.

Spot platinum XPT= added 3.4% to $2,284.71 per ounce, while palladium XPD= gained 4.9% to $1,818.25.