Gold prices climbed sharply on Thursday, extending gains from the previous session as escalating tensions in the Middle East and broader economic uncertainties pushed investors into safe-haven assets.
Spot gold rose around 0.8%, trading above $5,160 per ounce, while U.S. gold futures also strengthened, reflecting heightened risk aversion in global markets.
The advance in bullion comes as conflict in the Middle East entered a sixth day, with joint U.S. and Israeli forces conducting strikes across Iran, and Tehran retaliating with missile launches targeting neighbouring states and critical infrastructure.
The intensifying hostilities have rattled markets, with investors closely watching developments around the Strait of Hormuz, a key chokepoint for global oil and gas shipments.
The safe-haven appeal of gold has been reinforced by rising oil and gas prices, which have revived global inflation concerns. Higher energy costs can feed into broader consumer prices, complicating the inflation outlook and prompting traders to push back expectations for interest-rate cuts by the U.S. Federal Reserve.
Markets are now pricing in a first rate reduction as late as September and anticipate fewer total cuts in 2026, as policymakers weigh persistent price pressures against economic growth.
In addition to geopolitical uncertainty, investors are monitoring U.S. trade policy. Treasury Secretary Scott Bessent said a global 15% tariff on imported goods is expected to take effect this week, with rates likely reverting within five months. The potential impact on trade and supply chains adds to gold’s appeal as a hedge.
Gold’s rally reflects a broader shift in risk sentiment, with traders seeking refuge in the metal as equities remain under pressure and bond markets adjust to a slower anticipated pace of monetary easing.
Bullion’s gains this year have been significant, supported by both geopolitical risk and macroeconomic concerns, reinforcing its status as a key safe-haven asset.
