Gold rose for a fifth day as escalating conflict in the Middle East disrupted global energy markets and drove investors toward safer assets.
The precious metal rose as much as 0.8% to surpass $5,360 an ounce, after adding more than 3% during the previous four sessions, as the conflict reverberated throughout the region.
President Donald Trump said the United States would continue its military offensive for as long as necessary, and Israel announced a wave of strikes targeting Iranian command centers. Tehran attacked oil and gas infrastructure and threatened shipping in the strategic Strait of Hormuz.
The impact of rising energy prices on the US economy
The resulting rise in energy prices has fueled inflation fears in the United States, causing Treasury bonds to fall and increasing the likelihood that the Federal Reserve will keep interest rates unchanged for a longer period.
Traders are now pricing in an interest rate cut by September, later than previously expected. While higher rates could put pressure on gold because it doesn't pay interest, it could also reinforce the precious metal's role as a top store of value.
Even before the US and Israeli attacks on Iran over the weekend, there were signs that inflation in the United States was about to rise.
Manufacturing input prices jumped in February at their fastest pace since 2022, according to an index from the Institute for Supply Management. Jamie Dimon, CEO of JPMorgan Chase & Co., warned that inflation could become a major obstacle for the U.S. economy.
Performance of gold and other metals
Gold has risen by about a quarter of its value this year, supported by ongoing geopolitical and trade tensions, as well as concerns about the independence of the Federal Reserve.
The resurgence of broader withdrawals from bonds and currencies, known as the cut trade, has given a new boost to the precious metal's multi-year rally. Gold reached a record high above $5,595 an ounce at the end of January.
Spot gold rose 0.6% to $5,354.32 an ounce as of 8:50 a.m. Singapore time. Silver added 1.9% to $91.11, after ending Monday down 4.7%.
Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, a measure of the US currency, was steady after ending the previous session up 0.7%.
