Gold prices opened higher on Monday after the United States paused planned airstrikes, easing immediate conflict fears while sustaining the safe-haven demand that has powered the metal’s historic rally.
The move reflected a market still highly sensitive to geopolitical developments, with investors continuing to treat bullion as a hedge against uncertainty even as tensions appeared to cool. Gold has surged through a series of records over the past year, building on gains driven by geopolitical stress, a weaker dollar and steady inflows into exchange-traded funds.
Analysts at Deutsche Bank said the metal remains in what they described as an “explosive phase,” reaffirming their year-end price target despite the sharp advance already recorded. The bank noted that gold has consistently outperformed consumer price inflation over long stretches, a pattern it traced as far back as 1957, with the outperformance especially pronounced over the past two years.
That view underscores a growing conviction among some institutional investors that gold’s climb is structural rather than a short-term spike. The metal’s ability to hold gains through both flare-ups and pauses in geopolitical tension has reinforced its appeal as a store of value.
The rally has been building for months. Earlier this year, gold pushed past $5,100 an ounce amid a broad safe-haven rush, extending a run that has repeatedly redrawn the metal’s record highs.
Central bank buying has added a further layer of support. Sustained accumulation by official institutions, including in Asia, has tightened available supply and lent structural strength to prices, even during periods when individual buyers stepped back amid elevated costs.
The dollar’s trajectory remains a key variable. A softer greenback typically makes gold cheaper for holders of other currencies, amplifying demand, while shifting expectations around interest rates continue to influence the metal’s non-yielding appeal.
Despite the latest de-escalation, market participants remain wary that any renewed flare-up could quickly reverse sentiment and send prices higher again. For now, the pause in planned strikes has done little to dent the underlying momentum.
With banks such as Deutsche Bank maintaining bullish targets and geopolitical risks far from resolved, gold’s trajectory in the coming months is expected to hinge on the interplay of conflict headlines, monetary policy and persistent institutional demand.