Gold surges to five-week high after US, Israeli attacks on Iran

Gold prices rose by more than 2% in European trading on Monday, extending gains for a fourth consecutive session and reaching the highest level in five weeks, supported by strong demand for the precious metal as a safe haven amid escalating geopolitical tensions and growing fears of a broader global conflict.

The United States and Israel launched wide-scale strikes on Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, significantly increasing the risk of a prolonged military confrontation that could have clear repercussions for the global economy.

Price Overview

• Gold prices today: Gold rose by 2.2% to $5,393.92, the highest level since January 30, up from the opening level at $5,279.21, while the session low was also recorded at $5,279.21.

• At Friday’s settlement, gold gained 1.8%, marking a third consecutive daily advance, supported by weakness in the US dollar.

• The precious metal posted a 7.9% gain in February, marking its seventh consecutive monthly increase and the longest winning streak in two years.

• The latest monthly gain was driven by continued buying from central banks, institutions, and individual investors seeking gold as a preferred alternative investment amid geopolitical and economic uncertainty, in addition to renewed concerns surrounding US assets due to President Trump’s volatile policy direction.

The Iranian Conflict

The current conflict began with sudden military strikes targeting sensitive locations inside Iran, representing the most serious escalation seen in years. The United States and Israel launched coordinated attacks on strategic Iranian targets that they said were linked to military and security capabilities, in what was described as a major shift in the ongoing tensions.

Tehran quickly responded by launching waves of missiles targeting American assets and bases across several Gulf countries, widening the scope of the confrontation and drawing regional actors into the risk zone.

In a highly sensitive development, Iranian Supreme Leader Ali Khamenei was reportedly killed on the first day of the strikes, a development that created a major political and security shock both inside and outside Iran and added an unprecedented dimension to the conflict.

Iran declared a state of maximum alert and vowed a broad and painful response, while US and Israeli forces raised their readiness levels in anticipation of further escalation.

Within the first hours of the strikes, partial airspace closures were announced across several countries in the region, accompanied by heightened military movements and rising fears of a broader regional war.

The military actions were accompanied by strong political messaging, with each side attempting to impose new deterrence equations while the international community closely monitors developments that could reshape the balance of power in the Middle East.

US Interest Rates

• Federal Reserve Governor Christopher Waller said last week that he is open to keeping interest rates unchanged at the March meeting if February labor market data shows that conditions have stabilized after weak performance in 2025.

• According to CME’s FedWatch Tool, markets are pricing a 96% probability of unchanged interest rates in March, while the chance of a 25-basis-point rate cut stands at 4%.

• Investors are closely watching upcoming US economic data and comments from Federal Reserve officials to reassess these expectations.

Gold Outlook

Kyle Rodda, analyst at Capital.com, said that unlike previous escalations in this conflict, there is now a strong incentive for both sides to continue escalating, which could create a volatile and unstable environment for more than just a few days — a scenario that is very supportive for gold.

Independent analyst Ross Norman said gold may be the best indicator reflecting global uncertainty, adding that prices are expected to reach new record highs as the world enters a new phase of geopolitical instability.

Last week, both JPMorgan and Bank of America reiterated projections that gold could rise toward $6,000 per ounce. JPMorgan said it expects sufficient demand from central banks and investors to eventually push prices toward $6,300 per ounce by the end of 2026.

SPDR Gold Trust

Holdings in SPDR Gold Trust — the world’s largest physically backed gold ETF — rose by 3.43 metric tons on Friday, marking the fifth consecutive daily increase, bringing total holdings to 1,101.33 metric tons, the highest level since April 21, 2022.