Gold prices increased by as much as 2% on Monday following significant military actions by the U.S. and Israel against Iran, resulting in the death of Supreme Leader Ayatollah Ali Khamenei. This development has heightened geopolitical tensions and intensified global economic uncertainty. Spot gold increased by 1.72% to $5,368.09 an ounce, as of 0010, reaching its peak in over four weeks. U.S. gold futures increased by 2.58%, reaching a price of $5,382.60 per ounce. Israel initiated a fresh series of strikes on Tehran on Sunday, to which Iran retaliated with increased missile barrages, following the assassination of Khamenei that has plunged the Middle East and the global economy into heightened uncertainty.

In contrast to earlier escalations in this conflict, there exists a considerable incentive for both parties to persist in their escalation, which poses the risk of creating a chaotic, uncertain, and consequently volatile environment that could extend beyond just a few days. The outlook for gold appears to be quite favorable, according to Kyle Rodda. Bullion, a conventional safe-haven asset, has reached successive record highs this year as a result of increased global political and economic uncertainty. The recent rally is underpinned by a 64% increase in 2025, fueled by significant central bank purchases, substantial inflows into exchange-traded funds, and anticipations of a loosening in U.S. monetary policy.

Last week, J.P. Morgan and Bank of America reaffirmed their outlook that gold prices may ascend toward the significant $6,000 threshold. J.P. Morgan has projected that the anticipated demand from central banks and investors in the current year will likely drive prices to $6,300 an ounce by the conclusion of 2026. Gold serves as a significant indicator of global uncertainty, and to blend metaphors, the mercury is indeed on the rise. “We should expect gold to be repriced higher to fresh records as we enter a whole new era of geopolitical uncertainty,” stated analyst Ross Norman. Data released on Friday indicated that U.S. producer prices increased more than anticipated in January, implying that inflation may accelerate in the upcoming months.

This week, market participants will closely monitor a range of U.S. labor market indicators, such as the ADP employment report, weekly jobless claims, and the non-farm payrolls report. Spot silver increased by 1.68% to $95.35 per ounce following a monthly gain in February. Spot platinum increased by 0.74% to $2,382.15 per ounce, while palladium rose by 0.25% to $1,790.60 per ounce.