Gold climbed to $1,077.80 ( 0.24%) amid demand for safe-haven assets, which rose after Saudi Arabia cut diplomatic relations with Iran on Sunday in response to an attack of its embassy in Tehran. On Monday Bahrain cut its diplomatic ties with Iran. A selloff in stocks supported bullion too.
Investors traditionally turn to gold at times of crisis and geopolitical tensions, but such gains are normally short-lived. Fundamentals remained unchanged: the dollar is expected to be strong on higher rates, which are expected to grow further in 2016.