Gold extended its rally on Friday as renewed geopolitical tensions in the Middle East drove investors toward safe-haven assets. The surge followed an Israeli strike on Iran, which heightened fears of broader regional conflict and sent bullion prices to their highest levels in weeks.
📈 Gold Prices Spike Amid Geopolitical Uncertainty
- Spot gold rose as much as 1.8% to hit $3,446.86 per ounce, its highest since mid-April’s record rally.
- By 10:45 a.m. ET, prices eased slightly, still up 1.5% at around $3,436.
- US gold futures climbed 1.6% to $3,456.10 per ounce in New York.
The latest gains add to a 30% year-to-date rally in gold, driven by a combination of global instability, softening US economic data, and expectations of interest rate cuts.
🗣️ Analysts React: “Geopolitical Scare” Fuels Demand
The Israeli airstrike late Thursday created what Daniel Pavilonis, senior market strategist at RJO Futures, described as “a little bit of geopolitical scare” in financial markets.
“Prices will stay elevated in anticipation of what’s to come — especially any retaliation by Iran,” he said.
Charu Chanana, strategist at Saxo Capital Markets, echoed that sentiment:
“The risk of Iranian retaliation, including threats to US bases, adds to the uncertainty and supports haven flows.”
🛡️ Gold as a Hedge Against Risk
Gold’s strength this year has been underpinned by both geopolitical instability and economic caution. Friday’s price jump followed two consecutive days of gains fueled by weaker US inflation and jobs data, which increased speculation that the Federal Reserve may begin cutting interest rates later in the year.
“With markets already on edge, gold remains a key hedge — not only against conflict but also potential spillovers into inflation and volatility,” Chanana added.
🏦 Institutional Demand and Bullish Forecasts
Major financial institutions remain bullish on gold:
- UBS‘s Mark Andersen, Co-Head of Global Asset Allocation, said: “Gold has been the best addition to our portfolios since mid-2023. It’s a hedge against Middle East tensions, rising debt, and inflation fears.”
- Goldman Sachs recently forecast gold could reach:
- $3,700 by the end of 2025
- $4,000 by mid-2026, driven by strong central bank demand
- Bank of America also sees a path to $4,000 per ounce within the next 12 months.
💡 Outlook: More Upside Ahead?
With the yellow metal now within $60 of its all-time high of $3,500.05, analysts say that any further escalation in the Middle East, combined with dovish monetary policy, could push gold even higher in the months ahead.