June 17 (Reuters) - Gold prices rose on Tuesday as geopolitical tensions escalated in the Middle East, with focus also turning to the U.S. central bank's policy decision on Wednesday, while silver surged to a 13-year high.
Spot gold was up 0.2% at $3,390.73 an ounce as of 10:00 am EDT (1400 GMT), while U.S. gold futures fell 0.2% to $3,410.40.
"Geopolitical uncertainty, with the Israeli-Iran war that will probably escalate before it de-escalates, is going to keep a floor under the market for safe-haven bidding," said Jim Wycoff, senior analyst at Kitco Metals.
Israel's military said Iran's military leadership is "on the run" and that it had killed Iran's wartime chief of staff Ali Shadmani overnight four days into his job, after he replaced another top commander killed in the strikes.
U.S. President Donald Trump said that he wanted a "real end" to the nuclear dispute with Iran and indicated he may send senior American officials to meet with the Islamic Republic as the Israel-Iran air war raged for a fifth day.
Elsewhere, the Federal Reserve will announce its policy decision on Wednesday, followed by Chair Jerome Powell's press conference.
The U.S. central bank is widely anticipated to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.
A low interest rate environment and geopolitical uncertainty tend to boost gold's appeal.
Central banks around the world expect their gold holdings as a proportion of their reserves to increase over the next five years, a survey by the World Gold Council showed.
Data showed that U.S. retail sales dropped more than expected in May, but consumer spending remained supported by solid wage growth.
Spot silver gained 2.1% to $37.1 per ounce, reaching its highest level since February 2012.
"The next objective for the silver bulls is $40, and I think that's achievable in the coming weeks or sooner," Wycoff added.
Platinum added 0.4% to $1,251.81 and palladium rose 1.7% to $1,047.23.
Reporting by Sarah Qureshi in Bengaluru; Editing by Jan Harvey
