Gold Prices Surge as Middle East War Fuels Safe-Haven Demand
Gold prices extended their rally as escalating tensions in the Middle East pushed investors toward safe-haven assets. The ongoing air conflict involving the United States and Israel against Iran has heightened fears of a prolonged regional war, driving strong demand for gold.
According to Reuters (Tuesday, March 3, 2026), spot gold climbed 1% to US$5,377.21 per ounce at 01:22 local time. The gain marked the fifth consecutive session of advances. In the previous session, bullion touched its highest level in more than four weeks after weekend strikes by the United States and Israel on Iran.
Meanwhile, U.S. gold futures for April delivery rose 1.5% to US$5,391.90 per ounce, reinforcing bullish momentum in the precious metals market.
Middle East Conflict Boosts Safe-Haven Buying
Tim Waterer, Chief Market Analyst at KCM Trade, said uncertainty surrounding the scope and duration of the conflict has been a key driver behind gold’s surge.
“The scale and duration of the conflict remain highly uncertain, and amid that uncertainty, gold is capturing the bulk of safe-haven demand,” he noted.
Tensions escalated further after Iranian media reported that a senior official from the Islamic Revolutionary Guard Corps (IRGC) claimed the Strait of Hormuz had been closed. Iran also warned it would target any vessel attempting to pass through the strategic waterway.
Such a move could disrupt nearly one-fifth of global oil flows, triggering a sharp spike in crude oil prices and intensifying inflation concerns worldwide.
Strong US Dollar Fails to Cap Gold Rally
The U.S. dollar remained near a more than five-week high, supported by cautious market sentiment and strong demand. Typically, a stronger dollar pressures gold by making it more expensive for holders of other currencies.
However, during periods of heightened geopolitical risk, investors often buy both the U.S. dollar and gold simultaneously as hedging instruments. According to Waterer, gold prices could climb even higher if not restrained by dollar strength.
Inflation fears are now back in focus, particularly given rising oil prices and reduced shipping volumes through the Strait of Hormuz.
Trump Signals Continued Military Action
Former U.S. President Donald Trump stated that military operations would continue as long as necessary, warning of further large-scale attacks without providing specific details.
The strikes on Iran have drawn the Gulf region deeper into conflict, resulting in dozens of civilian casualties across Iran, Israel, and Lebanon. The crisis has also disrupted global air transportation and halted shipments through the Strait of Hormuz.
Other Precious Metals Follow Gold Higher
The rally extended beyond gold:
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Spot silver rose 1.4% to US$90.67 per ounce, after hitting a more than four-week high.
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Spot platinum gained 0.6% to US$2,316.50 per ounce.
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Palladium jumped 1.6% to US$1,795.08 per ounce.
Outlook: Safe Haven Trend Likely to Continue
With geopolitical tensions intensifying and inflation risks rising, gold prices may remain supported in the near term. Investors will closely monitor developments in the Middle East conflict, oil price movements, and the U.S. dollar for further direction in the precious metals market.