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.

The euro slipped in European trading on Monday to its lowest level in six weeks against the US dollar, as investors focused on buying the dollar as the preferred safe-haven asset amid escalating global geopolitical tensions and intensifying military confrontation between the United States and Israel on one side and Iran on the other.

The single currency is also facing pressure from concerns over rising global energy prices linked to the Iranian conflict, which could complicate the European Union’s efforts to refill fuel storage facilities as inventories remain at record-low levels.

Price Overview

• Euro exchange rate today: The euro declined against the dollar by 0.7% to $1.1737, the lowest level since January 23, down from Friday’s close at $1.1817, while recording an intraday high at $1.1796.

• The euro ended Friday’s session up by about 0.2% against the dollar, marking its second gain in three days as part of a recovery from lower levels.

• During February, the euro lost 0.3% against the dollar, marking its first monthly decline since October, amid renewed expectations for at least one European interest rate cut this year.

The US Dollar

The dollar index jumped حوالي 0.6% on Monday, reaching a six-week high of 98.22 points, reflecting broad-based strength in the US currency against a basket of major and minor currencies.

This rise came as investors increased purchases of the dollar as a preferred alternative investment after the United States and Israel carried out strikes on Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, raising the risk of a prolonged military conflict in the Middle East.

The Iranian Conflict

The current war began with surprise military strikes targeting sensitive locations inside Iran, in what has been described as the most serious escalation 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 a move viewed as a major shift in the ongoing confrontation.

Tehran responded quickly by launching waves of missiles targeting American assets and bases across several Gulf countries, expanding the scope of the confrontation and increasing regional risk.

In a highly sensitive development, Iranian Supreme Leader Ali Khamenei was reportedly killed on the first day of the strikes, a development that triggered 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 intensified military movements and fears of a wider regional war.

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

Impact of the Iranian Conflict

Analysts at Wells Fargo said in a note that the euro faces a difficult situation. Europe’s natural gas storage refilling season is about to begin, while the European Union is entering the period with record-low inventory levels, meaning it may need to purchase large amounts of energy at a time when prices could rise sharply.

European Interest Rates

• Money markets are pricing the probability of a 25-basis-point interest rate cut by the European Central Bank in March at around 25%.

• Traders have revised expectations from keeping rates unchanged throughout the year to anticipating at least one 25-basis-point cut.

• To reassess those expectations, investors later today will closely monitor comments from European Central Bank President Christine Lagarde.

The Japanese yen fell in Asian trading on Monday against a basket of major and minor currencies, resuming losses after a two-day pause against the US dollar, as investors favored the dollar as the preferred safe-haven asset amid escalating global geopolitical tensions and growing military confrontation between the United States and Israel on one side and Iran on the other.

With inflationary pressures easing on policymakers at the Bank of Japan, expectations for a Japanese interest rate hike in March have declined. Investors are now awaiting additional key economic data from Japan to reassess those expectations.

Price Overview

• Japanese yen exchange rate today: The US dollar rose against the yen by 0.4% to 156.71 yen, up from the day’s opening level at 156.07 yen, while recording a session low at 156.07 yen.

• The yen ended Friday’s trading up by 0.1% against the dollar, marking its second consecutive daily gain as part of a recovery from a two-week low of 156.82 yen.

• Over the course of February, the yen lost about 0.8% against the dollar, pressured by concerns surrounding potential expansionary economic policies proposed by Japanese Prime Minister Sanae Takaichi.

The US Dollar

The dollar index jumped by about 0.45% on Monday, reaching a six-week high at 98.09 points, reflecting broad strength in the US currency against a basket of global currencies.

This rise came as investors increased purchases of the dollar as a preferred safe-haven asset after the United States and Israel carried out strikes on Iran, which reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, raising fears of a prolonged military conflict in the Middle East.

The Iranian Conflict

The current conflict began with surprise military strikes targeting sensitive sites inside Iran in what has been described as the most serious escalation in years. The United States and Israel launched coordinated attacks on strategic Iranian targets, saying they were linked to military and security capabilities, in a move seen as a major turning point in the ongoing tensions.

Tehran responded quickly by launching waves of missiles targeting American assets and bases across several Gulf countries, broadening the scope of the confrontation and increasing regional risks.

In a highly sensitive development, Iranian Supreme Leader Ali Khamenei was reportedly killed on the first day of the strikes, a development that triggered a major political and security shock both inside and outside Iran, adding 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 hours of the strikes, partial airspace closures were announced across several countries in the region, alongside increased military movements and growing fears of a wider regional war.

The military operations were accompanied by strong political messaging, with each side seeking to establish new deterrence dynamics as the international community closely monitors developments that could reshape the balance of power in the Middle East.

Japanese Interest Rates

• Analysts at Morgan Stanley and MUFG wrote in a joint research report: We had considered the probability of a Japanese rate hike in March or April to be low, but with rising uncertainty linked to developments in the Middle East, the Bank of Japan is likely to adopt a more cautious stance, reducing the likelihood of near-term rate hikes.

• Market pricing for a quarter-point rate hike at the Bank of Japan’s March meeting remains around 15%.

• Pricing for a quarter-point rate hike at the April meeting stands near 40%.

• In the latest Reuters survey, the Bank of Japan is expected to raise interest rates to 1% by September.

• To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.

The United States and Israel launched military strikes on Iran on Saturday, targeting key leadership figures, drawing the Middle East into a new conflict that US President Donald Trump said would eliminate a security threat and give Iranians an opportunity to overthrow their rulers.

The strikes have alarmed neighboring oil-producing Gulf states, as fears grow that the confrontation could widen, while Tehran responded by launching missiles toward Israel.

Below are potential scenarios for how the conflict could reverberate across global markets:

Potential surge in oil prices

Oil remains the clearest barometer of Middle East tensions. Iran is a major oil producer and sits opposite the energy-rich Arabian Peninsula across the Strait of Hormuz, through which roughly 20% of global oil supply flows. Any escalation could restrict crude flows and drive prices sharply higher.

Brent crude was trading near $73 per barrel on Friday, up about 20% since the start of the year.

Four trading sources said some major oil companies and global trading houses have suspended crude and fuel shipments through the Strait of Hormuz following the attacks.

William Jackson, chief emerging markets economist at Capital Economics, said that even if the conflict is contained, Brent could rise toward $80 per barrel, the level reached during the 12-day war in Iran last June.

He added in a note that a prolonged conflict disrupting supply could push prices toward $100 per barrel, potentially adding between 0.6 and 0.7 percentage points to global inflation.

Heightened volatility across markets

The conflict is likely to amplify volatility in global markets, which have already experienced sharp swings this year due to Trump’s tariffs and broad selloffs in technology stocks.

The US VIX volatility index has climbed about one-third this year, while the MOVE index, which tracks US Treasury volatility, has risen 15%.

Analysts believe currency markets will not be immune.

Commonwealth Bank of Australia noted that the US dollar index fell about 1% during the June war, though the move was short-lived and reversed within three to four days.

In a note published last week, analysts said the scale of any decline would depend on the size and expected duration of the conflict.

They added that if the war drags on and disrupts oil supply, the US dollar would likely strengthen against most currencies except the Japanese yen and Swiss franc, as the United States is a net energy exporter and benefits from higher oil and gas prices.

While previous moves were short-term and followed by rapid recoveries, JPMorgan indicated that the situation could differ this time if the conflict persists and risk premiums remain elevated, especially if escalation with Iran leads to more intense operations against its regional proxies.

Safe havens return to focus

The Swiss franc, traditionally seen as a safe haven during periods of instability, is expected to face additional upward pressure, creating potential challenges for the Swiss National Bank. The franc has already gained about 3% against the dollar this year.

Gold is also likely to attract renewed inflows. The metal has posted record performance, rising 22% since the start of 2026, while silver has delivered strong gains as well.

US Treasuries may also benefit from increased demand, as yields have fallen in recent weeks.

Bitcoin, however, has not behaved as a safe haven. It fell 2% on Saturday and has lost more than a quarter of its value over the past two months.

Outlook for gold and silver

Gold and silver are expected to open Monday with notable gains, driven by escalating tensions between Israel and Iran, prompting investors to hedge through safe-haven assets, according to market experts.

Developments intensified after Israel launched preemptive missile strikes against Iran, causing explosions in Tehran and raising fears of a broader conflict. Analysts say such uncertainty typically channels flows into gold and silver.

Gold briefly approached $5,300 per ounce, while silver moved near $93 per ounce. Market participants are watching whether gold could reach $6,000 and silver $200, though analysts caution that such levels would require sustained demand and prolonged global instability.

Spot silver rose 7.85% to $93.82 per ounce, while gold traded at $5,296 per ounce as of 09:33 GMT on February 28. US gold futures for April delivery closed Friday at $5,247.90, up 7.6% since the start of February.

Middle East markets in focus

Equity trading in Middle Eastern markets on Sunday, including Saudi Arabia and Qatar, is expected to provide an early gauge of investor sentiment. While these markets are closely tied to oil prices, an expanding conflict could have broader economic implications.

Ryan Lemand, chief executive and co-founder of Neovision Wealth Management, said markets would likely decline if hostilities persist, adding that Gulf equities could fall between 3% and 5% depending on the scale of the conflict.

Airlines and defense stocks

Global airlines canceled flights across the Middle East on Saturday, and their shares could come under pressure if the conflict expands and more airspace closures are imposed.

Conversely, European defense manufacturers could see additional demand, with the European defense sector index already up about 10% since the start of the year.