Gold Prices Reach One-Month High Amid Middle East Conflict

Gold prices rose to a one-month high on Monday. Escalating conflict in the Middle East drove investors to safe-haven assets, extending last week’s rally.

Spot gold climbed as much as 2.9% to more than $5,400 an ounce. This marked its highest level since late January. It later pared some gains as U.S. markets opened. Other precious metals saw declines, with silver falling almost 5% to below $90 an ounce.

Geopolitical tensions in the Middle East fueled gold’s rise. These tensions reached a breaking point Saturday after a U.S. and Israeli attack on Iran killed the Islamic Republic’s supreme leader Ali Khamenei. Tehran responded with missile attacks on targets across the region.

The United Arab Emirates was among the targets. The UAE is a key supplier of bullion to buyers in China and India, and a transit point for shipments from London. The country partially closed its airspace and suspended flights in Dubai, temporarily halting metal flow. Traders are now rerouting consignments previously scheduled through Dubai.

Analysts expect geopolitical instability and less risk appetite to support gold prices. Gold has already notched multiple record highs this year, climbing nearly 25% over the first two months. Bank of America forecasts prices to reach $6,000 an ounce over the next 12 months. JPMorgan’s year-end target remains $6,300, and it recently raised its long-term forecast to $4,500 per ounce.