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Gold (GC=F) futures jumped 4% to trade above $5,400 per ounce on Monday as a widening conflict in the Middle East drove investors toward safe-haven assets. Silver (SI=F) also rose, following the broader move higher in precious metals.
JPMorgan analysts expect a “risk premium” jump in gold prices in the near-term of more than 5% to 10% in the aftermath of US-Israel strikes on Iran over the weekend and counter attacks in the region.
However, those geopolitical price spikes can “can be sharp but hard to sustain,” said the analysts.
Gains could reverse if the conflict eases, or equity market losses prompt investors to sell assets to cover losses or raise cash. On Monday US stocks were poised to open sharply lower.
Despite the potential for short-term volatility, JPMorgan forecasts demand from central banks and investors will ultimately push gold prices to $6,300 per ounce by the end of 2026.
“A near-term boost in geopolitical risk premium is clearly aligned with our bullish view on gold, but it is far from the sole reason we remain structurally bullish on the metal,” wrote JPMorgan’s Patrick Jones.
A prolonged conflict could highlight longer term drivers of gold prices such as rising deficits and the risk of a deteriorating economic backdrop if higher oil prices persist.
On Monday, gold was trading roughly $200 below the all-time high set in January, after closing out its eight straight month of gains.
The move pushed gold’s year-to-date gains to 23%, which came as central bank purchases, lower interest rates, and a weaker dollar have driven up demand.
Meanwhile, silver (SI=F) futures have risen 21% year to date. Palladium (PA=F) and platinum (PL=F) also extended their momentum, building on massive rallies for precious metals last year.
“With a few notable exceptions, 2026 is looking like 2025 on steroids,” Robin Brooks, senior fellow at the Brookings Institution wrote over the weekend.
Monday’s gains for precious metals came despite a move higher in the US dollar (DX-Y.NYB) in the wake of the attacks.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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