Gold rose for a fifth consecutive session, climbing as much as 0.8% to exceed US$5360 an ounce as escalating conflict in the Middle East upends global energy markets and drives investors toward safe-haven assets.
The rally, which has seen bullion add more than 3% over the previous four sessions, intensified following Israel’s announcement of a “wave of strikes” targeting Iranian command centres.
President Donald Trump further galvanised market volatility by stating the US would continue its military offensive indefinitely.
With Tehran retaliating against oil and gas infrastructure and threatening shipping in the strategic Strait of Hormuz, the resulting spike in energy prices has reignited global inflation fears.
The geopolitical instability has caused a slump in US Treasuries, increasing the likelihood that the Federal Reserve will maintain higher interest rates for a longer period.
Traders have subsequently recalibrated their expectations, pricing in a rate cut for September—significantly later than previous estimates.
While higher rates typically weigh on non-yielding assets like gold, the current economic climate has reinforced bullion's status as a superior store of value amid a broader "debasement trade."
The surge comes on the heels of February data showing manufacturing input prices rising at their fastest pace since 2022, a trend JPMorgan Chase & Co. CEO Jamie Dimon warned could become a “skunk at a party” for the economy.
Having rallied nearly 25% this year, gold remains supported by persistent trade tensions and concerns regarding the Fed’s independence.