Gold jumps after Israel launches strikes on Iran’s nuclear sites

Gold spiked after Israel conducted airstrikes targeting Iran’s nuclear sites and military leadership, raising fears over a significant escalation of hostilities in the Middle East.

Bullion climbed as much as 1.6% on the news. Israeli Prime Minister Benjamin Netanyahu said the operation “will continue for as many days as it takes to remove this threat.” Iranian state television reported that the head of the Islamic Revolutionary Guard Corps, Hossein Salami, was killed.

Iran vowed to respond “harshly” against the Israel and the US — which said it wasn’t involved in the operation. The precious metal is trading around $60 below an all-time record of $3 500.10 an ounce reached in April.

Prime Minister Benjamin Netanyahu said the operation “will continue for as many days as it takes to remove this threat.” Israel believes it killed at least some nuclear scientists and senior Iranian generals in the attacks, according to a military official. Iranian state television said Hossein Salami, the commander of the Islamic Revolutionary Guard Corps, was reportedly among the dead.

“The risk of Iranian retaliation, including threats to US bases, adds to the uncertainty and supports haven flows,” said Charu Chanana, a strategist at Saxo Capital Markets Pte. “With markets already on edge and risk sentiment deteriorating, gold is likely to stay bid as a hedge — not just against conflict risk, but also a possible spillover into inflation and volatility.”

The move higher extended a two-day gain, after weak US inflation and jobs data fueled bets that the Federal Reserve will lower interest rates later this year. A report on Thursday showed US producer price inflation remained muted in May, while a separate print showed recurring applications for unemployment benefits rose to the highest since the end of 2021.

Gold has rallied 30% this year, with investors increasingly seeking safety in the haven asset due to concerns over President Donald Trump’s aggressive trade policies and geopolitical tensions, including in Ukraine. Strong demand from central banks and sovereign institutions has also supported prices.

Israel’s attack on Iran followed repeated warnings from Netanyahu about striking the OPEC producer and crippling its nuclear program. US and Iranian negotiators are scheduled to hold a round of talks in Oman on Sunday about Tehran’s atomic program, but Trump said this week that he’s less confident about the chances of a deal.

Spot gold was 1.5% higher at $3 437.60 an ounce as of 10:49 a.m. in Singapore. The Bloomberg Dollar Spot Index rose 0.2%. Silver climbed, and platinum and palladium dropped.

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