PRECIOUS-Gold gains as Middle East conflict revives safe-haven bid

By Pablo Sinha

March 4 (Reuters) - Gold prices climbed 2% on Wednesday, rebounding from their lowest in more than a week reached in the previous session, as the dollar took a breather and mounting tensions in the Middle East drove investors toward safe havens.

Spot gold XAU= gained 2.2% to $5,198.58 per ounce by 1017 GMT, after falling more than 4% on Tuesday.

U.S. gold futures GCcv1 for April delivery added 1.7% to $5,211.20.

The U.S. dollar fell 0.2%, making greenback-priced gold more affordable for buyers using other currencies.

"After the past few days of position unwinds and dollar strength, markets are back to a more typical macro risk-off stance, with silver higher too. A pause in the rise of the dollar and Treasury yields helps with their opportunity costs," said Jamie Dutta, market analyst at Nemo.money.

"Gold and silver's safe-haven characteristics can shine again."

Gold's appeal as it draws support from the widening conflict in the Middle East is expected to remain intact even if some investors have favored the dollar as their preferred safe-haven, traders and analysts said on Tuesday.

Spot silver XAG= advanced 5.3% to $86.39 per ounce, after falling more than 8% in the last session.

U.S. forces continued round-the-clock assaults on Iran, and Israel mounted a "broad wave" of strikes targeting Iranian missile sites and air defense systems.

Asian stocks tanked as investors dumped crowded bets on chipmakers on worries that the widening Middle East war would drive an oil shock, accelerating inflation and delaying interest rate cuts.

Markets see the U.S. Federal Reserve holding rates at its two-day meeting later this month. FEDWATCH

"If the military campaign prolongs or expands across the region, safe-haven demand could continue to support gold above the $5,000/oz level and potentially open the door for a retest of the recent highs," said Linh Tran, senior market analyst at XS.com.

Spot platinum XPT= added 5.1% to $2,189.68 an ounce. The global platinum market is forecast to post a fourth consecutive year of deficit in 2026 at 240,000 troy ounces, the World Platinum Investment Council said. Palladium XPD= gained 3.6% to $1,705.71.