Gold held near multi-week highs on Monday as escalating hostilities in the Middle East fuelled a renewed flight to safety, with investors seeking refuge in traditional haven assets.
The precious metal initially surged beyond the US$5,400 level before paring some gains in early Asian trade.
By 3:10 pm AEDT (4:10 am GMT), spot gold was up 1.5% at US$5,358.49 per ounce.
The rally was driven by heightened geopolitical uncertainty after coordinated attacks on Iranian targets intensified regional tensions.
Despite a firm United States dollar, typically a headwind for bullion, demand for Gold as a store of value remained robust.
The Times of Israel reported that the Israel Defence Forces struck Hezbollah positions in Beirut and across Lebanon in response to rocket fire, broadening concerns about regional spillover.
The UK Ministry of Defence also confirmed that British forces responded to a suspected drone strike at a military base in Cyprus.
U.S. President Donald Trump indicated that operations could continue for several more weeks, stating that attacks would persist until U.S. objectives were achieved.
Gold is also drawing support from sharply higher oil prices, as fears of supply disruption add to inflationary risks.
The Strait of Hormuz has come into focus after reports that Iran’s Islamic Revolutionary Guard Corps Navy prevented several oil shipments from transiting the vital waterway.
Looking ahead, geopolitical developments are expected to remain the dominant driver of sentiment. U.S. Defence Secretary Pete Hegseth is scheduled to hold a press conference later in the session, according to an X post from the Department of Defense, which may provide additional clarity on the evolving situation.
