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.

Spot ⁠platinum added 5.6% to $2,334.25 per ounce, while palladium gained 5.4% to $1,826.21.