Gold extended its advance for a 5th straight session as intensifying conflict in the Middle East rattled energy markets and pushed investors toward haven assets.
Bullion rose as much as 0.8% to above US$5,360 an ounce, taking gains to more than 3% over the prior four sessions as fighting reverberated across the region. US President Donald Trump said the US would keep up its military campaign “for as long as it takes”, while Israel said it launched a “wave of strikes” aimed at Iranian command centres. Iran, meanwhile, has struck oil and gas facilities and threatened shipping through the strategically vital Strait of Hormuz.
The surge in energy costs has revived US inflation concerns, weighing on Treasuries and strengthening expectations that the Federal Reserve will keep interest rates higher for longer. Markets are now pricing a first rate cut by September, later than previously anticipated. While elevated rates can be a headwind for non-yielding gold, they can also bolster its appeal as a store of value during periods of inflation risk.
Even before the weekend’s US-Israeli strikes on Iran, there were indications price pressures in the US were building. A gauge from the Institute for Supply Management showed manufacturing input costs jumped in February at the fastest pace since 2022. JPMorgan Chase chief executive Jamie Dimon also warned inflation could become a “skunk at a party” for the US economy.
Gold is up close to 25% this year, supported by ongoing geopolitical and trade strains and worries about the Fed’s independence. A renewed shift away from bonds and currencies — often described as the “debasement trade” — has added momentum to the metal’s multiyear run. Gold set a record above US$5,595 an ounce in late January.