Spot Gold soared to a fresh 1-month high above $5,410/oz. on Monday after the US and Israel initiated massive strikes on Iran, leading to the death of Supreme Leader Ayatollah Ali Khamenei and escalating geopolitical tensions. This has triggered a rush into safe-haven assets.
Yesterday Israel launched more strikes on Tehran, while Iran responded with missile barrages.
“Unlike previous escalations in this conflict, there is fairly strong incentive here for both sides to continue to escalate potentially – and that runs the risk of leading to a pretty chaotic, uncertain and, therefore, volatile environment for more than just a few days … the dynamic for gold is pretty positive,” Kyle Rodda, senior financial market analyst at Capital.com, was quoted as saying by Reuters.
Having surged 24% year-to-date, Gold has reinforced its role as the go-to safe-haven asset in times of escalating geopolitical risks.
“Gold remains the clearest barometer of investor fear,” eToro’s Josh Gilbert commented.
In terms of macro data, this week’s focus will likely set on US labor market data prints, including the ADP employment, weekly jobless claims and the key Non-Farm Payrolls reports.
Spot Gold was last up 2.45% on the day to trade at $5,407.68 per troy ounce.
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