Safe-haven demand lifts gold amid widening conflict, but dollar strength curbs upside

Gold prices climbed in Asian trade on Tuesday, marking a fourth consecutive session of gains as investors assessed the escalating conflict in the Middle East. However, strength in the U.S. dollar limited the metal’s upside momentum.

Spot gold advanced 1.1% to $5,378.55 per ounce as of 20:26 ET (01:26 GMT), while U.S. gold futures rose 1.5% to $5,390.06. The precious metal had already gained 1% in the prior session.

Widely regarded as a safe-haven asset during periods of geopolitical uncertainty, bullion attracted fresh demand following an intense weekend of military activity in West Asia.

Large-scale strikes by U.S. and Israeli forces targeted Iran, reportedly resulting in the death of Supreme Leader Ayatollah Ali Khamenei along with several senior military officials. Tehran responded with missile attacks across the region.

Tensions expanded beyond Iran, as Israeli forces carried out strikes in Lebanon after Hezbollah attacks, and reports emerged that Kuwaiti air defenses mistakenly shot down U.S. aircraft.

U.S. President Donald Trump indicated that military operations could persist for several weeks and acknowledged uncertainty within Iran’s leadership following Khamenei’s death, highlighting the risk of extended regional instability.

Tehran also threatened to target vessels transiting the strategically vital Strait of Hormuz—a key artery for global oil shipments—intensifying concerns over potential supply disruptions and reinforcing demand for defensive assets such as gold.

Crude prices surged on fears of supply constraints, fueling inflation expectations and underpinning gold’s appeal as a hedge. Nonetheless, gains in bullion were restrained by a firmer U.S. currency.

The U.S. Dollar Index edged up 0.2% during Asian hours after surging 0.8% in the previous session to its highest level since late January. A stronger dollar typically pressures gold by increasing its cost for holders of other currencies.

Elsewhere in the precious metals complex, silver rose 1.6% to $90.75 per ounce, while platinum gained 0.5% to $2,321.06 per ounce.

Sources: Ayushman Ojha