FILE PHOTO: An employee takes granules of 99.99 percent pure gold at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin

(Reuters) - Gold prices surged more than 2% on Wednesday, crossing the key $1,600 mark, as investors sought cover in the safe-haven metal after Iran fired rockets at Iraqi airbase which hosts U.S. forces.

FUNDAMENTALS

- Spot gold XAU= climbed 1.9% to $1,603.21 per ounce by 0056 GMT. Prices hit their highest since March 2013 at $1,610.90 earlier in the session. U.S. gold futures GCv1 rose 2% to $1,605.80.

- The jump in the price of what’s viewed by investors as a safer asset in times of political and economic uncertainty came after Iran’s missile attack on U.S.-led forces in Iraq early on Wednesday. The attack came hours after the funeral of an Iranian commander whose killing in a U.S. drone strike has raised fears of a wider conflict in the Middle East.

- The United States confirmed reports of the attack by Iran and said President Donald Trump had been briefed and the situation was being monitored.

- On the trade front, in a move that would make it tough for Beijing to meet import commitments in its ‘Phase 1’ trade deal with the United States, China will not increase its annual low-tariff import quotas for corn, wheat and rice to accommodate additional purchases of U.S. farm goods.

- Elsewhere, palladium XPD= hit a fresh all-time peak of $2,056.01 an ounce earlier in the session on a sustained supply deficit, and was last down 0.6% to $2,040.57.

- Silver XAG= jumped 1.2% to $18.60 per ounce, after hitting its highest since late September at $18.71, while platinum XPT= advanced 0.3% to $973.95.