Gold rose on Monday to a nearly two-month high as intensified clashes between Israel and Iran over the weekend fueled fears of a wider regional conflict, pushing investors toward safe-haven assets.
Spot gold was trading virtually unchanged at $3,428.89 an ounce at 0508 GMT, after hitting its highest level since April 22 earlier in the session. U.S. gold futures fell 0.1% to $3,448.10.
“It is the combined political risk premium that is rising due to the conflict between Iran and Israel at the moment that has driven demand for gold as a safe haven,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
We have a clear break above $3,400 at the moment and the short-term uptrend remains intact. We see a resistance level at $3,500 and the possibility of breaking through that level.
Israel and Iran launched new attacks on Sunday, killing and injuring civilians and raising fears of a wider regional conflict, with both armies urging civilians on the opposing side to take precautions against further attacks.
US President Donald Trump said he hopes Israel and Iran can negotiate a deal, but noted that sometimes countries have to fight first.
Gold is considered a safe-haven asset in times of geopolitical and economic uncertainty.
This week, investors will be watching a series of monetary policy decisions by central banks, with the focus on the US Federal Reserve on Wednesday.
The US central bank is widely expected to keep interest rates steady, with markets looking for signals on possible rate cuts in the coming months.
Futures markets suggest expectations of two rate cuts by the end of the year, possibly starting in September, driven by moderate inflation data last week. Meanwhile, spot silver fell 0.1% to $36.28 an ounce, platinum rose 0.4% to $1,233.12, while palladium gained 1.4% to $1,041.85.
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