Gold prices climbed above $5,400 on Monday after geopolitical tensions between the US and Iran escalated over the weekend, resulting in increased safe-haven demand.
Silver prices on COMEX also hit a more than one-month high, breaching $96 per ounce.
Geopolitical tensions and global economic uncertainty intensified after the US and Israel executed significant strikes on Iran, resulting in the death of Supreme Leader Ayatollah Ali Khamenei.
Experts believe that gold and silver prices could rise further with tensions escalating in a vulnerable region in the Middle East.
“A regional spillover or disruption to energy supplies would materially boost gold through higher oil prices, increased inflation expectations and contained real yields,” Ewa Manthey, commodities strategist at ING Group, said in a note.
“Sustained uncertainty would keep volatility and safe-haven demand elevated.”
At the time of writing, the COMEX gold contract was at $5,375.35 per ounce, up 2.4%, while silver was at $94.415 an ounce, up 1.2%.
Gold had hit a high of $5,406.59 earlier in the day, while silver rose to $96.930 an ounce.
Risk aversion
As European markets open, gold prices are experiencing a slight pullback, driven by buyers liquidating their long positions.
“However, the bullish potential for gold remains intact in the near-term amid continued geopolitical escalation in the Middle East,” Dhwani Mehta, analyst at FXStreet, said in a report.
In retaliation for rocket attacks, the Israel Defence Force (IDF) conducted strikes against Hezbollah positions throughout Lebanon, including targets in Beirut, according to a report by The Times of Israel.
US President Donald Trump suggested the conflict could last another four weeks, stating that attacks would persist until US objectives were achieved.
Separately, the UK Defense Ministry reported that British forces reacted to a suspected drone strike at their military base in Cyprus.
The Middle East and the global economy were plunged into further uncertainty following the killing of Khamenei.
A day after his death, Israel launched a new wave of strikes on Tehran on Sunday, prompting Iran to retaliate with additional missile barrages.
The price of gold continues to be bolstered by rising oil prices, which are fueled by supply disruption concerns.
As a result, the precious metal is acting as a safe-haven asset, given its established role as a key hedge against inflation, Mehta said.
Experts see higher gold prices
The 2025 surge of 64% provides the foundation for the latest gold rally.
This increase was fueled by several factors, including significant central bank purchases, strong investment flows into exchange-traded funds, and anticipation of an easing of US monetary policy.
Gold prices are projected to rise towards the significant $6,000 mark, a forecast recently reiterated by both JP Morgan and Bank of America.
Specifically, JP Morgan anticipates that sufficient demand from both central banks and investors this year will ultimately drive the price to $6,300 per ounce by the close of 2026.
The rise in US producer prices in January exceeded expectations, according to data released on Friday, suggesting inflation may accelerate in the near future.
“This reinforces, rather than changes, the broader gold narrative,” ING’s Manthey said.
The market remains supported by consistent central bank purchases and ongoing expectations for policy easing later in the year.
“Even if tensions stabilise, these structural drivers suggest downside should be limited, with any pullbacks likely to be shallow rather than trend-reversing,” Manthey added.
The current uptrend is well-established, with a mildly bullish near-term outlook, according to FXStreet’s Mehta.
This is supported by the price holding above the faster 21-day and 50-day Simple Moving Averages (SMAs), which themselves are positioned above the slower 100-day and 200-day SMAs.
“The Relative Strength Index (RSI) at 64.48 stays above the 50 midline, indicating firm but not extreme bullish momentum after cooling from earlier overbought readings,” Mehta added.
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