Gold and silver stocks jumped in premarket trading on Wednesday.
AGQ up 10%; Coeur Mining, Silvercorp Metal, First Majestic Silver, Pan American Silver up 4%; Newmont, Harmony Gold, Kinross up 3%.
Gold prices bounced back to hover near $5,100 on Wednesday, underpinned by safe-haven demand as renewed U.S.-Iran geopolitical tensions added to bullion's appeal a day after it posted its best day in more than 17 years.
Spot gold was up 2.9% at $5,082.94 per ounce, as of 0813 GMT, after surging nearly 6% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.
U.S. gold futures for April delivery climbed 3.4% to $5,103.50 per ounce.
The U.S. military on Tuesday shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the U.S. military said.
Gold is bouncing back from a low of $4,403.24 touched on Monday after its biggest two-day sell-off in decades.
"After such a sharp rally, a correction was expected, it was not surprising and with gold coming back up, the fundamentals have not changed much," ANZ analyst Soni Kumari said, adding that the geopolitical and economic backdrop remained mostly unchanged.
Goldman Sachs said on Wednesday that it saw significant upside risk to its $5,400 year-end forecast for gold on central banks maintaining their recent pace of accumulation alongside private investors stepping up gold ETF purchases.
"Going ahead ... we are expecting the same $5,600 levels (for gold) by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is $6,000/oz," said Jigar Trivedi, a senior research analyst at IndusInd Securities.
Spot silver rose 6.1% to $90.34 an ounce. It touched a record high of $121.64 on Thursday but fell to a month-low at $71.33 on Monday having registered a record single-session price wipe-out of 27% on Friday.
Markets now await ADP private payroll data for more cues on the Federal Reserve's policy path even as a partial U.S. government shutdown has delayed the closely watched employment report for January.