(Reuters) – Gold prices inched up on Thursday as investors preferred to stay put with the safe-haven metal even though the chances of an escalation in U.S.-Iran conflict waned after the two sides softened their stance.

Spot gold was up 0.1% at $1,557.34 per ounce by 0526 GMT. Prices hit their highest since March 2013 at $1,610.90 on Wednesday. U.S. gold futures were flat at $1,559.80.

President Donald Trump said on Wednesday the United States did not necessarily have to respond militarily to Iran’s attack on U.S. troops in Iraq, while Iranian Foreign Minister Mohammad Javad Zarif said the strikes “concluded” Tehran’s response to the killing of commander Qassem Soleimani.

Following the signal that both sides are looking to defuse the crisis “there is a degree of relief in markets,” said Ilya Spivak, a senior currency strategist at DailyFx.

“We did not see an immediate escalation, although it would not be accurate to say that it cannot happen, there is that risk.”

Gold, considered a safe investment in times of political and economic uncertainty, had risen as much as 2.4% on Wednesday and surpassed the key $1,600 level after Iran’s retaliatory attacks.

Limiting gold’s advance, Asian stocks erased their losses on the easing concerns of conflict.

“… lingering geopolitical concerns around the Middle East are keeping a bid under gold,” Stephen Innes, a market strategist at AxiTrader said in a note.

“Gold Bulls are still buying at the critical support level as back burner influences around trade and U.S. data uncertainty continues to argue for gold in the portfolio even as oil prices sell-off, and U.S. equities are back near record highs.”

Investors also took stock of data from China where consumer inflation steadied while factory-gate prices fell at a slower pace in December.

Holdings of the world’s largest gold-backed exchange-traded fund SPDR Gold Trust fell 1.05% to 886.81 tonnes on Wednesday.

Among other precious metals, palladium hit a record peak of $2,149.50 an ounce on sustained supply concerns, and was last up 1.8% to $2,142.51 an ounce.

Silver was flat at $18.08 per ounce, after hitting its highest since September at $18.85 on Wednesday, while platinum rose 0.2% to $955.61.