Gold prices resumed their upward march on Thursday as escalating geopolitical tensions in the Middle East drove investors back into safe-haven assets, highlighting the precious metal’s enduring appeal during periods of global uncertainty.
Spot gold rose 0.4 per cent to about $5,153 per ounce, recovering part of the previous session’s losses as investors sought protection from rising geopolitical risks and market volatility. The rebound came after bullion had retreated from recent highs above $5,400 per ounce, a pullback widely viewed as profit-taking following one of the most dramatic rallies in precious metals in recent years.
The renewed buying reflects a familiar pattern in global markets: when geopolitical risks intensify, capital flows rapidly into traditional safe havens such as gold and the US dollar.
The latest surge in bullion prices follows US-Israeli airstrikes on Iranian targets, which have heightened fears that the confrontation could evolve into a broader regional conflict. Such tensions have rattled financial markets, sending oil prices higher, weighing on equities and prompting investors to shift funds into defensive assets.
Exchange-traded funds backed by precious metals have already begun to reflect the renewed demand. Gold and silver ETFs climbed as much as five per cent this week, signalling strong institutional buying as investors reposition their portfolios amid rising uncertainty.
Regional markets are also seeing the effects of the global rally. Retail gold prices in the UAE have climbed sharply in recent days, mirroring international price movements as investors and consumers seek the perceived security of physical bullion during periods of geopolitical stress.
Despite Thursday’s rebound, analysts say the precious metals market remains in a period of volatile consolidation following an extraordinary price surge earlier this year.
Silver in particular has experienced dramatic swings. The metal briefly surged to nearly $96 per ounce before sliding sharply to around $87, reflecting heavy profit-taking after a historic rally. Prices had soared as much as 72 per cent in a single month and more than 320 per cent since the start of 2025, far outpacing the gains seen in most other asset classes.
Gold has also posted remarkable gains, rising roughly 30 per cent over the same period and more than doubling from earlier levels.
According to analysts at Heraeus, such rapid advances typically lead to extended periods of consolidation as markets digest the gains and speculative excesses unwind.
“Silver is more volatile than gold, but the implication for gold is similar,” Heraeus analysts said in a recent report. “It will most likely take more than a month or two and lower prices to remove the excessive optimism that pushed prices so far and so fast.”
History offers several parallels. Previous precious metals booms — most notably in 1980 and 2011 — pushed silver prices close to $50 per ounce before triggering multi-year declines. Those episodes saw prices retreat between 40 per cent and 70 per cent from their peaks.
Yet the current market environment differs in one important respect: global political and economic uncertainty remains unusually elevated.
Trade tensions have resurfaced after a US Supreme Court ruling questioned the legal foundation of several tariff measures introduced by President Donald Trump. While some tariffs remain intact, the administration has imposed new blanket tariffs of 10 per cent under alternative legislation, raising fresh concerns about global trade stability.
Currency movements are also influencing gold’s short-term trajectory.
Linh Tran, senior market analyst at XS.com, said that during periods of heightened volatility investors often turn first to the US dollar because of its superior liquidity.
“In times of market panic, capital often flows into the US dollar before gold,” Tran said, noting that the US Dollar Index recently approached the 98.8 level, creating temporary pressure on bullion prices.
However, Tran said the recent price correction should be viewed as a normal adjustment rather than the start of a sustained downturn.
“The decline mainly reflects increased volatility after a strong rally,” he said. “Gold continues to maintain its status as a key safe-haven asset in an environment of geopolitical instability.”
Investor behaviour appears to support that assessment. Holdings in SPDR Gold Shares, the world’s largest gold-backed exchange-traded fund, stood at around 1,094 tonnes in early March, only slightly below the 1,101 tonnes recorded at the end of February. The modest decline suggests that most of the recent selling has come from short-term futures traders rather than long-term investors exiting the market.
Silver, meanwhile, remains more vulnerable to sharp swings because of its dual role as both an industrial and investment metal. Even so, investor demand has not disappeared entirely. Global silver ETF holdings rose by more than 18 million ounces last week, reaching roughly 834 million ounces, according to Heraeus.
For gold, analysts say the $5,000 per ounce level remains a critical psychological support zone.
If geopolitical tensions intensify further or economic uncertainty deepens, safe-haven demand could push prices back toward their recent highs. Conversely, any easing of tensions or stabilisation in global markets could keep bullion trading in a volatile range as investors rotate back into riskier assets.
The powerful forces that have propelled gold’s rally — geopolitical instability, trade uncertainty and the search for portfolio protection — remain firmly in place, suggesting that volatility rather than a sustained decline may define the next phase of the precious metals market, analysts noted.
