Gold Set for a Sharp Advance

Gold prices are poised to surge when trading resumes Sunday night, driven by renewed safe-haven demand after US and Israel's attacks on Iran sharply escalated tensions in the Middle East. In retaliation, Iran moved to restrict traffic through the strategic Strait of Hormuz, a vital route for about one-fifth of the world’s oil and substantial natural gas flows, and launched attacks across neighbouring states, including the United Arab Emirates, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq and Syria. Bullion had already been on the rise, trading at 1-month highs of $5,278 on Friday and approching an all time high of $5,500 hit at the end of January as investors anticipated and attack and weighed aggressive US trade policies against persistently elevated inflation data.

Gold increased to 5251.00 USD/t.oz, the highest since January 2026. Over the past 4 weeks, Gold lost 3.21%, and in the last 12 months, it increased 83.61%.

Gold rose nearly 1% to above $5,220 per ounce on Friday, testing 2-month highs as investors weighed aggressive US trade policy against sticky inflation data. Bullion remains supported by safe-haven demand after the administration invoked Section 122 to implement 10% global tariffs, with Trade Representative Jamieson Greer signaling a potential hike to 15% following the recent Supreme Court ruling. This protectionist shift, coupled with stalled US-Iran nuclear talks in Geneva and reports of a US Embassy departure advisory in Israel, has supercharged gold’s appeal as a systemic hedge. On the data front, January core producer prices jumped 0.8%, the steepest monthly increase since mid-2025. While this "hot" data supported the Dollar and pushed the first fully priced rate cut to July, gold remained resilient. Gains were further bolstered by a massive rotation out of AI-heavy equities and into long-duration Treasuries, sending the 10-year yield to four-month lows.