Gold prices rose sharply by more than 2% during Asian trading on Monday as investors turned to 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 gained 2% to $5,380.55 per ounce by 01:33 ET (06:33 GMT), after earlier touching an intraday peak of $5,393.34 — its highest level since late January.
U.S. gold futures advanced 2.8% to $5,391.46.
Middle East escalation drives haven demand
Markets reacted strongly to the sharp increase in geopolitical tensions over the weekend. The killing of Iran’s most senior political and religious figure intensified fears of a broader regional confrontation and raised concerns about potential disruptions to oil shipments through the Strait of Hormuz, one of the world’s most important energy transit routes.
Israeli forces launched a fresh round of attacks on Tehran on Sunday, deploying missiles and aircraft against command centres and air defence systems. Iran responded with additional missile strikes targeting Israeli territory as well as U.S. military installations across the Gulf region.
The geopolitical shock prompted a widespread risk-off move, with global equities declining and oil prices surging, reinforcing gold’s appeal as a defensive asset during periods of uncertainty.
“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 point to key resistance levels
Michael Brown, Senior Research Strategist at Pepperstone, highlighted $5,400 per ounce as an important near-term level to watch, followed by the late-January record high of $5,595 per ounce.
“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 added that gold could potentially approach the $6,000 per ounce mark before the end of the year.
Gold has gained nearly 25% since the start of the year, supported by geopolitical uncertainty, sustained central bank buying and expectations that the Federal Reserve may ease monetary policy.
Among other precious metals, silver rose 1.3% to $95.15 per ounce, while platinum increased nearly 1% to $2,389.11 per ounce.
Benchmark copper futures on the London Metal Exchange edged up 0.3% to $13,411 per tonne, while U.S. copper futures rose 0.2% to $6.07 per pound.
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