Gold prices surged by over 2% during Asian trading on Monday as investors moved into safe-haven assets following large-scale military strikes by the United States and Israel against Iran that resulted in the death of Supreme Leader Ayatollah Ali Khamenei.
Spot gold advanced 2% to $5,380.55 per ounce by 01:33 ET (06:33 GMT), after earlier climbing to an intraday high of $5,393.34 — its strongest level since late January.
U.S. gold futures rose 2.8% to $5,391.46.
Middle East tensions lift demand for gold
Financial markets reacted sharply to the dramatic escalation in Middle East tensions over the weekend. The death of Iran’s most senior leader heightened concerns about a wider regional conflict and the risk of disruptions to oil flows through the Strait of Hormuz, a key global energy shipping route.
Israeli forces carried out another round of strikes on Tehran on Sunday, using missiles and aircraft to target command facilities and air defence systems. Iran responded with additional missile attacks directed at Israeli territory and U.S. military bases across the Gulf region.
The geopolitical shock prompted a broad risk-off reaction, with equities declining and oil prices jumping, reinforcing gold’s appeal as a defensive asset and store of value.
“A regional spillover or disruption to energy supplies would materially boost gold through higher oil prices, increased inflation expectations and contained real yields,” ING analysts said in a note.
Analysts highlight key upside levels
Michael Brown, Senior Research Strategist at Pepperstone, identified $5,400 per ounce — followed by the late-January record high of $5,595 — as important resistance levels to monitor.
“This weekend’s developments do reinforce the strong fundamental bull case for gold, which will remain the beneficiary of haven inflows in an increasingly uncertain world, with hefty retail and reserve demand both providing tailwinds too,” he said.
Brown also expects gold could potentially move toward the $6,000 per ounce level by year-end.
Gold prices have climbed nearly 25% so far this year, supported by geopolitical uncertainty, continued central bank buying and expectations of monetary easing by the Federal Reserve.
Among other precious metals, silver gained 1.3% to $95.15 per ounce, while platinum rose almost 1% to $2,389.11 per ounce.
Benchmark copper futures on the London Metal Exchange edged 0.3% higher to $13,411 per tonne, while U.S. copper futures increased 0.2% to $6.07 per pound.