The Middle East conflict escalates, with gold prices soaring to $5,406 per ounce as safe-haven demand continues to rise.
March 2 News: Over the weekend, the US and Israel launched coordinated strikes against Iran, resulting in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei. The Middle East situation quickly escalated, causing gold prices to surge significantly. In Asian morning trading, spot gold rose 2.4% to $5,406 per ounce, US gold futures increased 2.8% to $5,391.46 per ounce, with this year’s gold price up approximately 25%.
Iran subsequently launched missile attacks on Israeli and US military bases in Qatar, the UAE, Kuwait, and Bahrain. US President Donald Trump stated that military actions against Iran would continue until objectives are achieved. Tehran’s National Security Council Chief Ali Larijani declared that there will be no negotiations with the US, indicating the conflict could persist for some time.
Market risk aversion has sharply increased, with investors selling stocks and shifting to hard assets like gold, silver, and oil. Silver prices rose 2.4% to $96.04 per ounce; platinum increased 1.7%, and palladium rose 3.1%. Oil prices also surged, partly due to potential disruptions in the Strait of Hormuz, with one of Saudi Aramco’s refineries halting operations, adding upward pressure on oil prices. The US dollar index strengthened, but gold and oil prices continued to rise.
Analysts point out that $5,400 is the primary support level to watch, followed by the all-time high of $5,595 per ounce set in late January. Pepperstone strategist Michael Brown believes that weekend events reinforce the bullish case for gold, and expects prices to reach $6,000 by the end of 2026. ING analysts state that any disruption in energy supply could further push gold prices higher.
Franklin Templeton analysts suggest that the current market sentiment has shifted toward risk aversion, and investors may consider “selective allocation to gold” to hedge potential risks. As of Monday afternoon, Singapore spot gold was trading at $5,406.27 per ounce, indicating that gold remains the most favored safe-haven asset amid the Middle East conflict.