Gold prices soared to their highest level in nearly a month following Israel’s strike on Iran, which heightened Middle East tensions. Gold price is up over 1% and less than 2% away from crossing the all-time level recorded in April. On Friday, gold trades at $3,440 after touching an intra-day high of $3,444, as investors seek safety amid escalating geopolitical tensions and economic uncertainty.
“Amidst geopolitical tensions in the Middle East, gold is once again showing that it’s a safe and trusted option. People are rushing to invest in gold. We are seeing strong buying interest, and prices are now very close to hitting a new all-time high. If tensions continue, gold could break past this level soon. People trust the yellow metal in times of uncertainty and that’s exactly what’s driving the demand right now,” says Aksha Kamboj, Executive Chairperson, Aspect Global Ventures.
Gold’s all-time high price of $3,500 looks to be breached soon as the rally after Israel launched a preemptive strike against Iran doesn’t look to ease out quickly. “Gold prices have given a breakout of their resistance of $3,425(approx Rs 99,000), and now it seems we are heading towards the previous high of $3500 (approx. Rs 1,01,000) in the near term,” says Dr. Renisha Chainani, Head – Research at Augmont.
Prime Minister Benjamin Netanyahu stated that the attack was aimed at Iran’s nuclear program, but acknowledged that Tehran still can hit Israel.
Growing concern over US trade policy spurred demand for safe-haven assets. President Donald Trump threatened to put unilateral tariffs on trading partners, but Treasury Secretary Scott Bessent said that the existing 90-day tariff truce might be extended.
On the economic front, softer-than-expected US consumer and producer inflation statistics released earlier this week raised expectations for more Federal Reserve rate cuts this year, giving extra support for non-yielding commodities such as gold.
The core drivers of this rally present a complex picture of global uncertainty. Geopolitical tensions have reached a new high point, particularly in US-Iran ties, where diplomatic optimism has given way to concerns about a possible military conflict.
According to recent reports, the Trump administration’s indirect conversations with Iran have taken a decidedly unfavorable turn. The notion of a quick nuclear accord, which both parties had initially sought for their own political and economic gains, now appears increasingly unlikely.
The combination of these geopolitical and economic forces has resulted in a “perfect storm” for gold prices. Investors trying to hedge against currency depreciation, inflation fears, and geopolitical upheaval have increasingly turned to gold as a portfolio diversifier, resulting in persistent demand for the physical metal.
Gold price today in India is Rs 98,360, up by 45% over the last 12 months. Looking ahead, the direction of gold will most likely be determined by how Middle East tensions evolve. Any escalation of Middle Eastern tensions or more deterioration in trade negotiations could provide extra support to gold prices. In contrast, a resolution of diplomatic tensions or clarity on trade policy may dampen some of the market’s current safe-haven demand.
