* Oil surges nearly 20% at one point, world stocks slide
* Fed, BoJ meetings in focus later in the week
* Near-term support for gold around $1,500/oz - analyst (Updates prices)
By Brijesh Patel
Sept 16 (Reuters) - Gold rose more than 1% on Monday after an attack on oil facilities in Saudi Arabia inflamed worries over the stability of the Middle East, driving investors to seek refuge in assets seen as a haven from risk.
A spike in oil prices by as much as 20% in response to the attack also raised concerns over a potential rise in inflationary pressure, against which gold is often seen as a hedge.
Spot gold XAU= was up 0.9% at $1,501.73 per ounce as of 1254 GMT, paring earlier gains of 1.3%. U.S. gold futures GCcv1 rose 0.7% to $1,509.80.
"The reaction is driven by two factors - one is that people are treating gold as some sort of inflation hedge in this environment," Julius Baer analyst Carsten Menke said.
"The second and the most important factor is the increase in geopolitical tensions, (with) uncertainties related to this event," he added. "People are seeking shelter in the gold market."
Yemen's Iran-aligned Houthi group claimed responsibility for the attack on two plants at the heart of Saudi Arabia's oil industry on Saturday, which knocked out more than half the kingdom's output. President Donald Trump on Sunday said the United States was "locked and loaded" for a potential response after a senior official in his administration said Iran was to blame. is often used as a safe store of value during times of political and financial uncertainty.
While the attack sparked the biggest one-day rise in gold prices in nearly two weeks, an easing of tensions may lead to a swift retracement, analysts said.
"Near-term support for bullion sits around the psychological $1,500," MKS PAMP said in a note. "However the fluid nature of the Saudi Arabia situation may see gold test back toward $1,480 - $1,485 should there be no further escalation."
The attacks sparked supply fears in the oil market, sending crude prices to four-month highs, while weak economic data from China sapped investor appetite for riskier assets. MKTS/GLOB banks globally face increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade dispute hurts trade and business sentiment.
Investors are looking to the U.S. Federal Reserve and Bank of Japan policy meetings on Wednesday for signals on their future policy path. FEDWATCH tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.
Silver XAG= jumped 2.2% to $17.81 an ounce, while platinum XPT= was steady at $958.49.
Palladium XPD= was up 0.1% at $1,607.73 per ounce after hitting a record high of $1,626.81.