SINGAPORE: Gold rose, as war in the Middle East rattled markets and sent investors flocking to safer assets.
Bullion climbed as much as 1.8% to nearly US$5,375 an ounce in early trading, having gained more than 3% in the previous week. Conflict spread in the Middle East over the weekend after the US and Israel attacked Iran and Tehran responded with waves of missiles at targets in multiple countries. Iran’s supreme leader, Ayatollah Ali Khamenei, was killed on the first day of strikes.
Geopolitical tensions have been a key factor in gold’s multiyear rally, which has also been supported by elevated central-bank buying and a wider investor shift away from sovereign bonds and currencies. The metal has gained about a quarter so far this year, despite an abrupt pullback from a record high at the end of January.
Bullion posted its seventh consecutive monthly gain in February, the longest streak since 1973. Even ahead of the war with Iran, US president Donald Trump had adopted an increasingly aggressive foreign policy.
American troops seized Venezuela’s then-president Nicolás Maduro in January and the administration made threats to annex Greenland.
The US and Israel launched strikes across Iran on Saturday, while calling on the population to rise up against the Islamic regime. Tehran’s retaliatory barrage hit targets in Israel, as well as US bases and sites in countries including Qatar, the United Arab Emirates, Kuwait and Bahrain.
Spot gold rose 1.4% to US$5,353.61 an ounce as of 7:10am in Singapore. Silver advanced 1.5% to US$95.23. Platinum rose, while palladium edged lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, ended the previous week down 0.1%.
