Gold prices rose on Monday after the U.S. and Israel launched major strikes on Iran thatkilled Supreme Leader Ayatollah Ali Khamenei, escalating geopolitical tensions and deepening global economic uncertainty.
Spot gold was up 1.88% at $5,376.44 an ounce, as of 0632 GMT, after hitting its highest point in more than four weeks. Earlier in the session, bullion prices had climbed as much as 2%.
U.S. gold futures rose 2.7% to $5,389.20 per ounce.
Israel launched a new wave of strikes on Tehran on Sunday and Iran responded with more missile barrages, a day after the killing of Khamenei pitched the Middle East and the global economy into deepening uncertainty.
"Unlike previous escalations in this conflict, there is fairly strong incentive here for both sides to continue to escalate potentially - and that runs the risk of leading to a pretty chaotic, uncertain and, therefore, volatile environment for more than just a few days ... the dynamic for gold is pretty positive" said Kyle Rodda, senior financial market analyst at Capital.com.
However, the U.S. dollar index rose 0.27%, making gold more expensive for overseas buyers and capping the metal's gains.
Bullion, a traditional safe-haven asset, has hit successive record highs this year due to heightened global political and economic uncertainty.
The latest rally builds on a 64% surge in 2025, driven by strong central bank buying, robust inflows into exchange-traded funds and expectations of U.S. monetary policy easing.
"Gold is perhaps the finest barometer to reflect global uncertainty and, to mix metaphors, the mercury is rising. We should expect gold to be repriced higher to fresh records as we enter a whole new era of geopolitical uncertainty," said independent analyst Ross Norman.
Meanwhile, data on Friday showed that U.S. producer prices rose more than expected in January, suggesting inflation could pick up in coming months.
Investors will also watch a series of U.S. labor market readings this week, including the ADP employment report, weekly jobless claims and the non-farm payrolls report.
Spot silver added 1.3% to $95 per ounce, after registering a monthly gain in February.
Spot platinum was up 0.8% at $2,383.50 per ounce, while palladium advanced 2.3% to $1,826.59. (Reporting by Ashitha Shivaprasad and Kavya Balaraman in Bengaluru; Editing by Sonali Paul, Sherry Jacob-Phillips, Subhranshu Sahu and Sonia Cheema)
Reuters
