Gold prices soared on Thursday morning as investors reacted to escalating tensions between Israel and Iran, prompting a rush toward safe-haven assets. In the physical market, gold traded at $3,423.46 per ounce, marking a 1.2% increase compared to the previous day’s close. Since the beginning of the week, the precious metal has gained more than 3.5%, highlighting growing investor anxiety amid the geopolitical fallout.
In the U.S. futures market, gold contracts rose 1.2%, reaching $3,444.10 per ounce. Analysts attribute the surge to a combination of geopolitical uncertainty and increased demand for safe investments as conflict intensifies in the Middle East.
The sharp increase in gold prices follows early morning airstrikes by Israel targeting nuclear facilities and ballistic missile factories in Iran. The Israeli government claimed the attacks were aimed at disrupting Iran’s alleged nuclear weapons program. Tehran, on the other hand, rejected the accusations, insisting its nuclear ambitions are strictly civilian in nature. In retaliation, Iran launched approximately 100 drones toward Israeli territory, further escalating the already volatile situation.
Market experts warn that while the current jump in gold prices reflects immediate risk-aversion behavior, long-term impacts will depend on the progression of the conflict. “The strikes are currently driving a wave of gold buying… but it’s too early to determine whether this shock will lead to sustained price increases, as the situation is evolving rapidly,” said Carsten Menke, an analyst at Swiss bank Julius Baer.
He added that a prolonged rise in gold prices could become more likely if oil supply is disrupted due to direct attacks or political responses. “A sustained increase in oil prices would also reflect the spillover of the conflict into other Middle Eastern nations,” Menke warned.
Gold is traditionally viewed as a stable investment during times of war, economic instability, and low interest rates. History shows that during periods of geopolitical crisis, investors tend to move funds away from riskier assets and into gold to preserve value.
Meanwhile, in the broader precious metals market, silver remained stable at $36.36 per ounce. Palladium rose by 0.5% to $1,061.06, while platinum fell by 1.5% and traded at $1,274.30 per ounce.
Financial analysts stress that ongoing fluctuations in commodity prices will likely hinge on whether the Israeli-Iranian conflict expands and how global energy markets and central banks respond in the coming days.