Gold Price Rises Amid Middle East Conflict

Gold prices surged over 2% in early trading, climbing to around $5,390 an ounce, as investors sought safer assets amidst escalating tensions in the Middle East. The conflict began after the US and Israel launched strikes against Iran, leading to a wave of retaliatory missile attacks from Tehran.

Market Overview

The sharp increase in gold prices comes on the heels of a 3% gain in the previous week, driven by American troop deployments in the region. The metal has gained approximately 25% so far this year, despite a brief pullback from a record high of $5,595 an ounce in late January. Gold has posted its seventh consecutive monthly gain in February, the longest streak since 1973.

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Key Drivers

The rally in gold prices is attributed to a combination of factors, including:

• Elevated central-bank buying
• A shift away from sovereign bonds and currencies
• Geopolitical tensions and US President Donald Trump's aggressive foreign policy, which has led to a series of provocative actions, including the seizure of Venezuela's then-president Nicolás Maduro in January and threats to annex Greenland.

Market Reaction

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The conflict in the Middle East has sent oil prices surging by the most in four years, with the effective closure of the Strait of Hormuz plunging the global crude market into turmoil. The Bloomberg Dollar Spot Index, a gauge of the US currency, climbed 0.4% early on Monday. Precious metals, including gold, silver, platinum, and palladium, also gained in value.

Current Prices

• Spot gold: $5,380.91 an ounce
• Silver: $96.04
• Platinum: (price not specified)
• Palladium: (price not specified)