Gold surges to four-week high, as Middle East conflict fuels safe-haven rush

Gold prices extended their rally for a fifth straight session on Tuesday, as investors increased allocations to traditional safe-haven assets amid a deepening military confrontation between the United States and Israel against Iran.

Spot gold advanced 1 per cent to $5,377.21 an ounce in early Asian trading, building on the previous session’s surge that pushed bullion to its highest level in more than four weeks following weekend airstrikes. US gold futures for April delivery rose 1.5 per cent to $5,391.90.

Market participants cited mounting geopolitical uncertainty as a primary driver of flows into gold. Analysts noted that with the scope and duration of the conflict unclear, investors are gravitating toward assets perceived as stores of value during periods of instability.

Tensions escalated further after Iranian state media reported that a senior official from the Islamic Revolutionary Guard Corps said the Strait of Hormuz had been closed and warned that any vessel attempting to transit the key shipping lane could face military action. The Strait, a critical artery for global energy supplies, handles roughly one-fifth of the world’s oil shipments. Any sustained disruption risks tightening crude markets and intensifying inflationary pressures.

The US dollar hovered near a more than five-week high reached on Monday, underpinned by defensive positioning and cautious sentiment. While a stronger greenback can weigh on dollar-denominated commodities by making them more expensive for overseas buyers, analysts observed that in periods of acute stress, both gold and the dollar often benefit simultaneously from safe-haven demand.

Concerns over inflation have also moved to the forefront, particularly as oil prices trend higher and shipping volumes through the Strait of Hormuz face disruption. Elevated energy costs could further complicate the global economic outlook.

US President Donald Trump signaled that military operations would continue as long as necessary, warning of additional large-scale attacks without offering specific details.

Beyond the precious metals complex, spot silver gained 1.4 per cent to $90.67 an ounce after reaching a four-week high in the prior session. Platinum rose 0.6 per cent to $2,316.50, while palladium added 1.6 per cent to $1,795.08, reflecting broader strength across safe-haven and industrial-linked metals.