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Israel hits Iran nuclear facilities; Tehran launches

drones

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Attacks add to the bullish mood in the gold market,

analyst says

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All four metals on track for weekly gain

(Rewrites throughout, updates prices for EMEA morning session)

By Anushree Mukherjee

June 13 (Reuters) - Gold prices rose to a near two-month

high on Friday, driven by safe-haven demand as geopolitical

tensions escalated in the Middle East following Israel's

widescale strikes on Iran.

Spot gold was up 1% at $3,417.59 an ounce, as of

0803 GMT, after hitting its highest point since April 22 earlier

in the session. Bullion has gained more than 3.2% so far this

week.

U.S. gold futures gained 1% to $3,438.00.

The Middle East was thrust into renewed conflict after

Israel launched widescale strikes against Iran, saying it

targeted nuclear facilities, ballistic missile factories and

military commanders and that this was the start of a prolonged

operation to prevent Tehran from building an atomic weapon.

Iran launched about 100 drones towards Israeli territory in

retaliation.

The rising tensions add another layer of market uncertainty,

coming on the heels of U.S. President Donald Trump's trade

policies.

"For now, the attacks add to the bullish mood in the gold

market ... with the situation being highly in flux, it is too

early to tell whether this shock will lastingly lift prices,"

said Carsten Menke, an analyst at Julius Baer.

"Should there be disruptions to oil supplies - either

directly due to attacks or indirectly due to politically imposed

measures - or should the conflict spread in the region, then

gold could show a more lasting reaction."

Gold is used as a safe investment during times of

geopolitical and economical uncertainty. It also tends to thrive

in a low-interest-rate environment.

Elsewhere, a Consumer Price Index (CPI) report on Wednesday

showed cooler-than-expected data for May, followed by another

data on Thursday indicating that U.S. producer prices rose less

than anticipated.

Demand for physical gold weakened across major Asian hubs

this week as soaring prices deterred buyers, with rates in India

surging past the psychologically key 100,000-rupee mark.

Spot silver fell 0.2% at $36.31 per ounce, platinum

lost 1.6% to $1,274.50 and palladium shed 0.5% to

$1,060.44. All three metals were set for weekly gains.