According to Reuters, gold prices rose after the US and Israel launched large-scale airstrikes targeting Iran, killing Supreme Leader Ayatollah Ali Khamenei. This development has increased geopolitical tensions and pushed the global economy into a deeper state of instability.
Israel launched a new series of airstrikes targeting Tehran on Sunday. Iran responded with missile launches, just one day after Khamenei was assassinated - an event that plunged the Middle East and global economy into a more serious spiral of instability.
Mr. Kyle Rodda - senior financial market analyst at Capital. com, commented: "Unlike previous escalations, this time both sides have strong motives to continue to escalate conflict. This increases the risk of a chaotic, uncertain and volatile environment not just for a few days. In that context, the outlook for gold is quite positive.
Gold - a traditional safe haven asset - has continuously peaked this year due to increased global political and economic instability.
The latest price increase continues the 64% increase in 2025, driven by strong buying activity from central banks, large capital inflows into exchange-traded funds (ETFs) and expectations that the US Federal Reserve (Fed) will ease monetary policy.
Independent analyst Ross Norman said: "Gold is perhaps the clearest measure reflecting the level of global instability. And if like a thermometer, "mercury" is rising. We should expect gold prices to continue to be valued higher, setting new records as the world enters a completely new phase of geopolitical instability.
In other developments, data released on Friday showed that production costs in the US in January increased more sharply than expected, raising concerns that inflation may accelerate in the coming months.
Investors are also monitoring a series of data on the US labor market this week, including the ADP employment report, weekly jobless claims, and the non-farm payroll report.
On other precious metals markets, spot silver prices rose 1.97% to $95.51/ounce, after recording a monthly increase in February. Spot platinum prices rose 1.4% to $2,394/ounce, while palladium rose 1.81% to $1,803/ounce.
The world gold market operates through two main pricing mechanisms. The first is the spot market, where prices are quoted for transactions and immediate delivery.
The second is the futures contract market, where prices are set for futures delivery. Due to year-end closing activities, December gold futures contracts are currently the most actively traded type on the CME.
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