Gold and Silver Prices Rise as Investors Seek Safe Havens

SadaNews - Gold prices have risen after the war in the Middle East disrupted markets, pushing investors toward safer assets.

The precious metal rose by more than 2% to around $5,390 an ounce in early trading, after having surged more than 3% the previous week with the mobilization of U.S. forces in the region.

The scope of the conflict widened over the weekend after the United States and Israel launched strikes on Iran, and Tehran responded with waves of missiles targeting sites in several countries. Iranian leader Ali Khamenei was killed on the first day of the strikes.

Geopolitical Tensions Support the Upward Trend

Wider geopolitical tensions, along with disruptions in international relations during the presidency of Donald Trump, have been key factors in the long upward trend of gold.

Prices have also benefited from increased purchases by central banks and a broader shift by investors away from sovereign bonds and currencies.

The metal has risen by about a quarter since the beginning of the year, despite a sharp decline from a record high of over $5,595 an ounce at the end of January.

Seventh Month of Gains

Gold recorded its seventh consecutive monthly gain in February, the longest streak since 1973.

Even before the war with Iran, Trump had adopted an increasingly hawkish foreign policy. U.S. forces captured then-Venezuelan President Nicolás Maduro in January, and the administration made threats to annex Greenland.

Ahmad Assiri, a strategic analyst at "Piper Sandler Companies", stated that "the rise in gold on Monday is an early indicator of investors turning toward safe-haven assets amid escalating regional uncertainty."

Oil and Dollar Volatility as Confrontation Wides

The United States and Israel carried out strikes across Iran on Saturday, urging the population to rise against the regime. Iranian retaliatory attacks hit targets in Israel, as well as U.S. bases and positions in countries including Qatar, the UAE, Kuwait, and Bahrain.

Oil surged at the fastest pace in four years, as the Strait of Hormuz was effectively closed, throwing the global crude market into turmoil, while the dollar also rose.

Hong Hao, Chief Investment Officer at "Lotus Asset Management", noted that "precious metals, oil, and commodities are rising despite the recovering dollar, even though they are priced in U.S. dollars."

He added, "This proves that these tangible assets are the true hard currency during this extraordinary period."

Prolonged Iran War Tips the Scale for Oil Price Surge

The Bloomberg Dollar Spot Index, which measures the performance of the U.S. currency, rose by 0.4% in early trading on Monday.

Gold rose in spot trading by 1.9% to $5,380.91 an ounce by 7:40 AM in Singapore. Silver also increased by 2.4% to $96.04. Both platinum and palladium also saw gains.