Spot gold was up 1.72% at $5,368.09 an ounce by 0010 GMT, hitting its highest point in more than four weeks.
The price of American gold increased by 2.58 percent to 5382.60 dollars per ounce.
Israel launched a new wave of strikes on Tehran on Sunday and Iran responded with a barrage of missiles, a day after Khamenei’s assassination plunged the Middle East and the global economy into deep uncertainty.
“Unlike past tensions in this conflict, there is a very strong incentive for both sides to continue to escalate potential – and that risks leading to a more chaotic, uncertain and therefore volatile environment than in a few days… The dynamic for gold is very positive,” said Kyle Roda.
The bullion, a traditional safe-haven asset, hit record highs earlier this year due to heightened global political and economic uncertainty.
The latest rally builds to a 64% increase in 2025, driven by strong central bank purchases, strong inflows into exchange-traded funds and expectations of US monetary policy easing. Last week, JP Morgan and Bank of America reiterated that the price of gold could rise to the key level of $6,000. JP Morgan noted that it foresees enough demand from central banks and investors this year to eventually push prices to $6,300 an ounce by the end of 2026.
Independent analyst Ross Norman said: “Zero is perhaps the best barometer to reflect global uncertainty and, to add to the metaphor, mercury is rising. We should expect gold to rise to fresh records as we enter a whole new era of geopolitical uncertainty.”
Data on Friday showed that US producer prices rose more than expected in January, suggesting that inflation will pick up in the coming months.
Investors will also watch a series of U.S. labor market readings this week, including the ADP employment report, weekly jobless claims and the nonfarm payrolls report.
Silver rose 1.68% to $95.35 an ounce after posting a monthly gain in February.
Spot platinum rose 0.74% to $2,382.15 an ounce, while palladium rose 0.25% to $1,790.60 an ounce.
