Gold prices rose on Monday as investors piled into haven assets after the US and Israel attacked Iran, killing its supreme leader Ayatollah Ali Khamenei, triggering a conflict that is threatening to derail the global economy.
On the first trading day since the strikes began, spot gold was up 1.37 per cent $5,350.13 an ounce at 9.13am UAE time, after rising as much as 2 per cent, the highest level in four weeks.
US gold futures also climbed 2.2 per cent to $5,363.1 an ounce.
"Gold has received a haven bid in early trading … pulling silver and the rest of the precious metals complex with it,” said Edward Bell, acting group head of research and chief economist at Emirates NBD.
Israel and the US launched a wave of attacks on Iran on Sunday. Drones and missiles were fired across the Middle East as Iran promised a crushing response to the killing of its supreme leader.
A three-man leadership council has taken charge in Tehran as Israel bombs the Iranian capital. There were warnings that attacks will “escalate further” in the coming days.
The conflict has tipped the Middle East into turmoil, escalating geopolitical tensions and plunging the global economy into deepening uncertainty.
American President Donald Trump on Sunday said the new leadership in Iran had agreed to talk to US. But Ali Larijani, head of Iran's Supreme National Security Council, said in a post on X on Monday that Tehran would not negotiate with the US.
Long-running rally
The wider geopolitical turmoil and Mr Trump’s push to impose tariffs on its trading partners around the globe had already fuelled a long-running rally of gold. The rise of bullion is also supported by increased central bank buying.
Gold has hit record highs this year and reached the peak of $5,595 an ounce at the end of January. Although it has lost some ground, the precious metal is still more than 20 per cent higher since the beginning of this year, after rallying 64 per cent in 2025.
JP Morgan and Bank of America last week repeated their forecast that gold prices could rise to $6,000, driven by demand from central banks and investors this year. Analysts at JP Morgan expect gold prices to rise to $6,300 an ounce by the end of the year.
"Gold is perhaps the finest barometer to reflect global uncertainty and, to mix metaphors, the mercury is rising," Reuters quoted independent analyst Ross Norman as saying. "We should expect gold to be repriced higher to fresh records as we enter a whole new era of geopolitical uncertainty."
