Gold prices rose more than 2% as Monday’s U.S. and Israeli offensive against Iran escalated with no end in sight, raising concerns about growing geopolitical and economic uncertainty and triggering a flight to safe havens.
Spot gold rose 2.1% to $5,390.38 an ounce at 1050 GMT, after hitting a more than four-week high earlier in the session. The metal hit an all-time high of $5,594.82 on January 29th.
US gold futures rose 3% to $5,406.30 an ounce.
“What we’re seeing is an increase in safe-haven assets, which is reflected in the rise in gold, but also in losses in risk-related assets such as equities,” said Ricardo Evangelista, an analyst at ActivTrades.
Global stocks fell on the day as the military conflict in the Middle East is expected to continue for weeks, threatening to upend the global economic recovery and reignite inflation concerns.
Following the U.S. and Israeli attacks, Iran counterattacked Gulf cities with U.S. military bases, disrupting regional air traffic and halting the passage of oil and product tankers through the crucial Strait of Hormuz.
Israel expanded its attacks on Monday to include attacks on Iranian-backed Hezbollah militants in Lebanon.
Global political turmoil and heightened economic uncertainty have driven bullion prices higher this year.
The rally extended from last year’s 64% rise in gold, on the back of strong central bank buying, strong inflows to exchange-traded funds (ETFs) and expectations for easing US monetary policy.
“The situation remains highly uncertain, and this deterioration has further fueled the bullish mood in gold and silver markets, helping to stabilize prices and portfolios amid heightened financial market volatility,” said Julius Baer analyst Carsten Menke.
BNP Paribas last week raised its 2026 gold price forecast by 27% to $5,620 an ounce, saying it expects prices to peak above $6,250 an ounce by the end of the year as macro and geopolitical uncertainties persist.
Investors will be focused on a series of U.S. labor statistics scheduled for release this week, including the ADP jobs report, weekly jobless claims and non-farm payrolls report.
Meanwhile, spot silver rose 1.7% to $95.36 an ounce after hitting an all-time high last month in early trading.
Spot platinum fell 0.7% to $2,348.65 an ounce, while palladium rose 0.8% to $1,806.96.
(Reporting by Noel John in Bengaluru; Additional reporting by Ashitha Shivaprasad and Kavya Balaraman; Editing by Sumana Nandy and Diti Pujara)
