Gold Rises 1%: Strait of Hormuz in Market Focus
Gold prices rose on Monday (March 2) as investors flocked to safe-haven assets after the escalation of the US-Iran conflict raised fears of a wider regional war. Market sentiment soured after the US and Israel launched a major attack on Iran, prompting risk-off sentiment across various asset classes.
In afternoon US trading, spot gold rose about 1% to $5,330.31/oz, after earlier touching $5,419.32/oz—its highest level since late January. Meanwhile, US gold futures rose 1.9% to $5,345.80/oz.
Gold's rise came amid rising demand for safe-haven assets, after military operations against Iran continued and reports of the assassination of Iranian Supreme Leader Ayatollah Ali Khamenei fueled fears of escalation. The market also highlighted the risk of disruption to oil shipments through the Strait of Hormuz, a crucial global energy route.
This geopolitical upheaval triggered a classic risk-off pattern: stocks weakened early in the session, while oil prices surged, ultimately strengthening gold's appeal as a store of value when uncertainty increases.
ING analysts believe that if the conflict escalates or energy supplies are disrupted, gold could receive an additional boost through rising oil prices, higher inflation expectations, and subdued real yields. Meanwhile, Pepperstone emphasized that the market now faces a much wider range of scenarios, making risk assessment extremely difficult and encouraging a defensive strategy of "reducing risk first, explaining later."
Source: Newsmaker.id
