Gold prices advanced sharply on Monday as escalating military action between the United States, Israel and Iran intensified global uncertainty, prompting investors to seek safety in precious metals.

Spot gold climbed around 1% to trade near $5,329 per ounce in early Asian hours, after touching a four-week high. At one point, prices were up nearly 2% during the session. U.S. gold futures also moved higher, gaining close to 2% to hover above $5,340 an ounce.

The rally followed a dramatic escalation in the Middle East after coordinated U.S. and Israeli strikes targeted key sites in Iran, resulting in the death of Supreme Leader Ayatollah Ali Khamenei. Tehran responded with additional missile attacks, heightening fears of a prolonged and potentially destabilizing conflict. The renewed tensions have raised concerns about energy supply disruptions, inflationary pressures and broader economic fallout.

Market analysts noted that unlike previous flare-ups, this round of hostilities carries a higher risk of sustained confrontation. That possibility has fueled demand for traditional safe-haven assets, with gold emerging as a primary beneficiary.

Gold has already delivered exceptional gains this year, supported by persistent geopolitical risk, strong central bank accumulation and heavy inflows into exchange-traded funds. Expectations that the Federal Reserve could ease monetary policy later this year have added further momentum to the bullish trend.

Major financial institutions remain constructive on the metal’s outlook. Several banks have recently reaffirmed projections that gold could approach the $6,000 level, with some forecasts suggesting prices may extend even higher into 2026 if central bank demand and investment inflows remain robust.

Recent U.S. economic data has also reinforced gold’s appeal. Producer prices rose more than anticipated in January, pointing to potential renewed inflation pressures. Traders are now turning their attention to upcoming U.S. labor market data, including the ADP employment report, weekly jobless claims and the highly anticipated non-farm payrolls release, for clues about the Federal Reserve’s next move.

Elsewhere in the precious metals market, silver pulled back modestly after posting strong gains in February, while platinum edged lower. Palladium, however, recorded a slight advance.

With geopolitical tensions rising and macroeconomic uncertainty lingering, gold’s role as a hedge against instability appears firmly back in focus.

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