ISLAMABAD: Gold prices surged to a one-month high on Friday as investors flocked to safe-haven assets following Israel’s military strike on Iran, intensifying geopolitical uncertainty in the Middle East.
Spot gold rose 1.3% to $3,428.28 an ounce by 0134 GMT, marking its highest level since May 7.
U.S. gold futures also climbed 1.4% to $3,449.60.
Bullion has now gained over 3.5% this week, fueled by fears of broader regional instability and shifting economic signals from the United States.
Investors Turn to Safety Amid Regional Tensions
The sharp rise in gold prices comes amid Israel’s declaration of a state of emergency and heightened fears of retaliatory strikes from Iran.
With the U.S. military preparing for possible evacuation of American citizens in the region, global investors are turning to traditional safe-haven assets like gold.
“This latest spike in hostilities in the Middle East has taken the focus off trade negotiations for now, with investors making a play towards safe-haven assets in response,” said Tim Waterer, chief market analyst at KCM Trade.
Waterer added that gold breaking above the $3,400 resistance level suggests further gains are likely if the conflict escalates.
U.S. Economic Data Supports Bullish Outlook
In addition to geopolitical factors, signs of a cooling U.S. labor market and subdued inflation are supporting expectations for an interest rate cut later this year.
Unemployment claims held at an eight-month high, and producer price data for May showed restrained inflation.
This follows a modest rise in consumer prices, reinforcing market speculation that the Federal Reserve could begin cutting rates as early as September.
Elsewhere in the metals market, spot silver dipped 0.1% to $36.33 per ounce, platinum fell 0.8% to $1,285.21, and palladium remained steady at $1,055.21 — all still on track for weekly gains.
