Gold surged close to a seven-year peak on Monday, as investors flocked to the safe-haven metal, while palladium surpassed the level of $2,000 to hit a record high.

Investors pushed safe-haven gold to a seven-year high, and oil jumped to its highest since September. Spot gold gained 1.6 per cent to $1,579.72 per ounce in jittery trade to reach its highest since April 2013.

Oil prices extended gains on fears any Middle East conflict could disrupt global supplies. Brent crude futures rose 2.04 per cent to $70 a barrel, while US crude climbed 1.7 per cent to $64.12.

European shares extended losses and were set for their worst day in a week, with the pan-European STOXX 600 index down 1.12 per cent by 0838 GMT. The European oil and gas stock index rose about 0.74 per cent and was the sole gainer among its peers, hitting its highest since July.

“Geopolitical events by their nature are unpredictable, but previous periods of increased tensions suggest that the impact on wider markets tends to be short-lived, with more lasting effects confined to local markets,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

“In general, this supports holding a diversified portfolio.”

Spot gold rose 1.7 per cent to stand at $1,577.98 per ounce by 0409 GMT. Earlier in the session, it had rallied as much as 1.8 per cent to touch $1,579.72, its highest since April 10, 2013. US gold futures gained 1.8 per cent to $1,580.30. “The geopolitics is taking center-stage,” said Benjamin Lu, an analyst at Phillip Futures.

Reuters