As the U.S. and Israeli air campaign against Iran intensified, investors sought safe-haven assets, boosting concerns that the conflict could escalate into a protracted regional war and increase uncertainty. As a result, gold prices increased for the fifth straight session on Tuesday.
At $5,362.90 an ounce, spot gold was up 0.7%. After the United States and Israel conducted strikes on Iran over the weekend, bullion rose to its highest level in over four weeks during the previous session. At $5,376.50, U.S. gold futures for delivery in April were up 1.2%.
This is Iran’s most direct warning since informing ships on Saturday that it was shutting down the export channel, a move that may cut off a fifth of the world’s oil supply and drive up petroleum prices dramatically.
Although holders of other currencies usually pay more for dollar-denominated assets like bullion when the dollar is stronger, this inverse link is not always true. Investors frequently purchase gold and the dollar as safe-haven assets during periods of increased uncertainty, such as rising violence or general market instability.
Due to strong demand and cautious market attitude, the dollar remained near its more than five-week high from Monday. The strike on Iran has sparked a conflict in the Gulf, killed numerous civilians in Iran, Israel, and Lebanon, disrupted international air travel, and stopped shipping through the Strait of Hormuz.
After reaching a more than four-week high in the previous session, spot silver increased by 0.2% to $89.64 per ounce on Tuesday. Palladium increased 1% to $1,784.81 per ounce, while spot platinum increased 0.3% to $2,297.05.
