Gold recorded a notable gain of more than 2% during Monday’s Asian session, as investors shifted toward hedging instruments following the US and Israeli strikes on Iran that resulted in the death of Supreme Leader Ayatollah Ali Khamenei. The development rapidly repriced political risk and prompted market participants to rotate away from high beta assets.
Spot gold moved above 5380 dollars per ounce after touching nearly 5393 dollars, its highest level since late January. US gold futures advanced at a faster pace toward 5391 dollars. The spread between spot and futures markets reflects expectations of sustained near term momentum supported by strong hedging flows.
The geopolitical shock was the primary catalyst. The killing of Iran’s most senior authority heightened the probability of broader confrontation, particularly given the strategic sensitivity of the Strait of Hormuz, through which a significant share of global oil exports passes. Escalating strikes and military targeting deepened market anxiety, pressuring equities while driving a sharp rise in energy prices.
From a price perspective, the 5400 dollar area stands out as a key threshold, followed by the late January record high near 5595 dollars. Several research houses suggest that continued haven inflows, alongside steady central bank and retail demand, could open the door for a move toward 6000 dollars before year end if tensions persist.
Silver advanced around 1.3%, while platinum gained close to 1%. Copper posted modest increases on both the London and US exchanges, highlighting the divergence between defensive precious metal demand and industrial metal performance.
In oil markets, prices opened the week with strong gains in Asia as military developments reshaped supply risk perceptions, particularly around the Strait of Hormuz, one of the most critical global energy routes. Traders incorporated a higher risk premium amid concerns over potential supply disruption.
Brent crude initially surged to 82 dollars per barrel before trimming gains to trade near 76 dollars, while West Texas Intermediate approached 67 dollars. The pullback followed OPEC+’s decision to raise output by 206000 barrels per day, an effort aimed at offsetting possible supply gaps, though the real impact remains dependent on shipping and export conditions.
Reports of attacks near the Strait of Hormuz intensified fears over supply security. Roughly 20% of global oil consumption transits through the waterway, making it central to current pricing dynamics.
OPEC+ continues to pursue market share recovery after a series of production increases during 2025. However, any broader disruption on the ground could quickly outweigh additional supply. At present, price direction remains closely tied to developments in the region, with sustained tensions supporting elevated risk premiums and any easing likely prompting swift portfolio repositioning.
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