WTI oil prices surge to an intraday high of $65.65, Brent to $70.83 a barrels, and Gold above $1600 an ounce after Iran, on its first retaliation, have fired about dozen rockets at the Ain al-Assad military base, which is hosting U.S.-led coalition in Iraq, raising fears of a wider Middle East tensions.

US officials have confirmed the strike, but there is no immediate report of causalities and damages.

The attacks and the potential of U.S. retaliation raise the possibility of violence spreading around the already tumultuous region.

Gold and oil prices are likely to remain more volatile. Looking forward, if analyze recent price behaviors, delays in retaliation will cool-off prices a bit while, retaliation will translate a higher price trajectory, of course.

Prices of oil will not able to sustain the recent gains in the premium as long as oil production facilities remain unaffected by a series of attacks. But if oil facilities get affected, the current rally will certainly get longevity with the potential to test $80-$85 depending on the quantum of the supply cut.

But at this momentum gold is looking better hedge for oil the way prices of gold have perked up recently, trading near $1600 an ounce, the level has seen the first time since 2013. Gold may fetch $1650 or even $1700 in the days to come if tensions escalated further from here, which have higher odds as of now.