Gold Pares Gains

Gold held above $5,300 on Monday, paring earlier gains after spiking past 5,419 dollars as a dramatic "buy the dip" rally in US stocks drained the metal's safe-haven momentum. While the initial strikes on Iran triggered a flight to safety, the S&P 500 staged a massive midday comeback, turning positive as investors bet that the conflict would not escalate into a full closure of the Strait of Hormuz. Crude oil also eased from its session highs, cooling the immediate inflation fears that had driven gold's run. Strength in tech giants like Nvidia and Microsoft further signaled a return to riskier assets, while a jump in the ISM Manufacturing price index to 70.5 pushed bets for later in the year rate cuts, reinforcing the dollar's appeal. At the same time, surging Treasury yields capped bullion’s appeal further.

Gold surged past 5,400 dollars on Monday, testing record highs as a dramatic escalation in Middle East warfare ignited a massive flight to safety. The joint strikes by the US and Israel that killed Iran’s Supreme Leader have effectively closed the Strait of Hormuz, threatening 20% of the world's oil supply and sending crude oil surging. This spike in energy costs has revived fears of a fresh inflation wave, prompting investors to abandon currencies and stocks in favor of bullion. Gold is outperforming as a hedge against the risk of prolonged regional war and potential strikes on Saudi energy hubs like the Ras Tanura refinery. With OPEC+ providing only a small output hike that failed to calm the market, and major tech and banking stocks tumbling, gold’s role as the ultimate store of value is being reinforced. The metal has now extended its longest winning streak since 1973 as the world grapples with a locked trade chokepoint and rising global instability.

Gold climbed more than 2% toward $5,400 per ounce on Monday, reaching an over one-month high as safe-haven demand intensified following joint strikes by the US and Israel on Iran over the weekend. The attacks resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, escalating regional tensions and disrupting maritime traffic in the oil-rich Gulf. Iran responded with retaliatory strikes at US bases across neighboring countries, including the UAE, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq, and Syria. Gold recorded its seventh straight monthly gain in February, the longest streak since 1973, driven by heightened geopolitical tensions and US President Trump’s reshaping of international relations. The rally has also been supported by strong central bank purchases and a broader investor move away from sovereign bonds and currencies.