Gold has risen back above $5,400 an ounce in early trading following U.S. missile strikes on Iran, sparking fresh speculation about whether the precious metal could break $6,000 in the coming weeks.
The renewed rally follows a volatile start to the year for gold bars. Gold hit a record high of over $5,550 in late January before falling sharply to around $4,700 in early February. Silver followed a similar path, sliding from over $120 to around $82. Both metals are now rising again, with silver trending back towards $100.
The latest surge follows coordinated U.S. and Israeli attacks on Iran over the weekend, which reportedly killed Supreme Leader Ayatollah Ali Khamenei and triggered retaliation by Tehran against U.S. allies in the Gulf. Tensions have escalated around the Strait of Hormuz, a key artery for global oil supplies, pushing up oil and safe havens.
Market analysts describe the situation as a “classic risk-off scenario,” with investors flocking to traditional stores of value amid fears of broader regional escalation, oil supply disruptions and renewed inflationary pressures.
TallyMoney founder and CEO Cameron Parry said the moves were entirely consistent with previous geopolitical crises.
“Both oil and gold prices rose on Monday morning as the Strait of Hormuz and safe havens came into market focus,” he said. “Geopolitical crises like the current one will inevitably put upward pressure on gold prices, and that is exactly what is happening this time.
“We are in a classic risk-off scenario and gold is the classic asset of choice. Gold was already benefiting from strong global demand, not only from central banks but also from retail investors seeking exposure in an increasingly volatile geopolitical climate.
“That demand could now increase even further as nations and individuals alike seek the security of the world’s ultimate store of value. Few would bet against gold.”
Riz Malik, director at R3 Wealth, said the extent of further gains will depend largely on how long the conflict lasts and how Iran responds.
“There was an immediate sharp increase in gold demand on Monday morning,” he said. “How much it will rise depends on how long this campaign lasts and how strong the Iranian retaliation is.
“Once again, global instability has been shifted to Defcon 4, and that means only one thing for precious metals: their price will rise.”
However, not all analysts believe that a rapid rise to $6,000 is imminent.
Tony Redondo, founder of Cosmos Currency Exchange, said that while the $6,000 mark is conceivable in the short term, it would require a sustained escalation.
“Already before Saturday’s military operations in Iran, gold prices had risen to $5,300, but to reach $6,000 next week would require a 15 percent rise, a feat usually reserved for a complete system collapse,” he said.
“While $6,000 is unlikely within a few days, this is a very likely target for March or April, particularly if the Strait of Hormuz is at risk in the longer term or the conflict expands.”
Redondo added that silver’s structural supply deficit could amplify the price reaction. “Silver is approaching $100 and its supply constraints make $120 a realistic target in the coming months in response to geopolitical fears,” he said, warning that strong rallies often lead to profit-taking.
Others argue that while geopolitical shocks can act as catalysts, deeper macroeconomic forces will ultimately determine gold’s performance.
Anita Wright, a licensed financial planner at Ribble Wealth Management, said structural pressures in the U.S. financial system are equally important.
“This weekend’s missile attacks will undoubtedly impact gold prices, but it is important not to confuse the catalyst with the underlying driver,” she said. “Gold doesn’t rise to $6,000 because of what happened in a single weekend. If it does, it’s because of monetary conditions.
“The U.S. faces trillions of dollars in refinancing needs alongside persistent budget deficits. Foreign appetite for U.S. Treasuries is clearly under pressure, long-term yields are rising, and equity valuations remain stretched. History tells us that when bond yields rise in an overvalued stock market, instability follows.”
Wright said that while an immediate rise to $6,000 was unlikely, significantly higher gold prices were plausible in the medium term as bond market tensions worsen and the Federal Reserve returns to liquidity support.
Nouran Moustafa, practice head and IFA at Roxton Wealth, urged investors to chase sharp moves driven by headlines.
“Gold prices were expected to open higher as investors moved to safe havens following the recent escalation, and that is what happened,” she said. “However, a jump to $6,000 in a matter of days would require something much worse, such as a direct disruption to energy supplies or major stress in financial markets.”
“Without that, we are more likely to see strong volatility than a sustained vertical rally.”
She warned that emotional investing can be costly during times of geopolitical stress. “Gold can act as portfolio insurance, but chasing quick spikes rarely ends well. Sensible allocation and risk management are more important than an emotional reaction to breaking news.”
With tensions in the Middle East showing little sign of easing and global markets already tense, gold’s next move will likely depend on whether the conflict remains contained – or leads to something far more disruptive for energy markets and global growth.
