Gold surged above $1 600/oz for the first time in more than six years after Iran attacked military facilities in Iraq hosting American troops in retaliation for the killing of a top general by US forces last week.

Prices jumped more than 2% after Iran fired a series of rockets at two US-Iraqi bases early Wednesday morning Baghdad time. Gold pared gains as Iran’s foreign minister said the country had concluded proportionate measures and isn’t seeking escalation or war, although it would defend against any aggression.

It wasn’t immediately clear whether there were casualties or major damage from the attacks. President Donald Trump tweeted “All is well!” and “So far, so good!”, adding that assessments are underway and he’ll make a statement Wednesday morning.

Bullion is off to a scorching start in 2020, with investors in thrall to the rising hostilities in the Middle East. Prices are building on their biggest annual gain in almost a decade, which was driven in part by easier monetary policy by central banks and global growth concerns.

“The escalation here has surprised me,” Jeffrey Halley, a senior market analyst at Oanda said by phone. “I’m very surprised that Iran has chosen such an overt way to retaliate, they’re almost inviting the US to unleash a shock-and awe response. I can only see gold and silver and oil continuing to consolidate these big gains in Asia this morning.”

Spot gold jumped as much as 2.4% to $1 611.42/oz, the highest since 2013, before paring its advance and trading at $1 586.24 by 10:55 a.m. in Singapore. Futures jumped as much as 2.5%. Holdings in bullion-backed exchange-traded funds rose to the highest since November on Tuesday, according to data compiled by Bloomberg.

GOLD SUPPORT

In other precious metals markets, silver surged to the highest since September. Crude oil climbed, while US stock futures and Asian equities pared earlier declines.

Gold may potentially breach $1,625 an ounce this quarter as investors seek tail risk hedges and protection from equity market drawdowns, with elevated geopolitical tensions across the Middle East set to support prices, Citigroup Inc. said in a note dated January 6. Goldman Sachs Group said this week that the metal may prove a better bet than oil amid rising tensions.

The Islamic Revolutionary Guard Corps earlier claimed responsibility for the barrage, which the Pentagon said was launched from Iran. A total of 15 missiles were launched, 10 of which hit the Ayn al-Asad base in western Iraq and another facility in Erbil, according to two US officials. Another struck the Taji air base near Baghdad while four fell out of the sky.

Investors will turn their attention to the US response, the scope of which could depend heavily on the damage and whether any Americans were killed or injured in the strikes. Trump has shown restraint in previous attacks in the region blamed on Iran that didn’t kill any U.S. citizens, but Iran’s quick claim of responsibility for the strike and the targeting of US military outposts make some sort of retaliation more likely.