Gold Surges Above $5,000 as US–Iran Tensions Fuel Safe-Haven Rush
Gold prices rebounded sharply on Wednesday, climbing back above the $5,000 mark as renewed geopolitical tensions between the United States and Iran reignited demand for safe-haven assets.
Spot gold rose 2.9 percent to $5,082.94 per ounce by 0813 GMT, following a nearly 6 percent surge on Tuesday, which marked bullion’s strongest single-day performance in more than 17 years. The metal had briefly pulled back earlier in the week after touching an all-time high of $5,594.82 last Thursday.
US gold futures for April delivery climbed 3.4 percent to $5,103.50 per ounce, reinforcing the bullish momentum across precious metals markets.
The renewed rally comes after the US military said it had shot down an Iranian drone that “aggressively” approached the USS Abraham Lincoln aircraft carrier in the Arabian Sea, adding fresh geopolitical risk to global markets and boosting gold’s appeal as a hedge against uncertainty.
Gold had earlier slipped to $4,403.24 on Monday, following its steepest two-day sell-off in decades. Analysts said the correction was expected after such a rapid rise.
“After such a sharp rally, a correction was expected — it was not surprising,” said Soni Kumari, an analyst at ANZ. “With gold moving back up, the fundamentals haven’t changed much, as geopolitical and economic risks remain largely intact.”
Major financial institutions remain bullish on bullion. Goldman Sachs said it sees significant upside risk to its $5,400 year-end forecast, citing continued central bank accumulation and rising investor interest in gold-backed exchange-traded funds.
Jigar Trivedi, senior research analyst at IndusInd Securities, said prices could push even higher in the coming months. “We expect gold to test $5,600 by the end of the first half or April-end, with further upside thereafter. Our year-end target remains $6,000 per ounce,” he said.
Other precious metals also posted strong gains. Spot silver jumped 6.1 percent to $90.34 an ounce, rebounding after a volatile period that saw prices swing sharply in recent sessions. Platinum rose 5.6 percent to $2,334.25, while palladium gained 5.4 percent to $1,826.21.
Markets are now watching upcoming US economic data, including ADP private payroll figures, for clues on the Federal Reserve’s policy outlook. A partial US government shutdown has delayed the release of official employment data, adding to market uncertainty.
The renewed strength in gold highlights its enduring role as a refuge during periods of geopolitical instability and economic unpredictability.