Gold prices surged on Friday, 13 June 2025, as investors flocked to safe-haven assets following Israeli airstrikes on Iran, reigniting fears of a broader conflict in the Middle East. The escalation, including US President Donald Trump’s call for the evacuation of Tehran, drove a sharp rebound in gold amid rising uncertainty.

Spot gold rose by 1.30% to $3 428.10 an ounce, approaching its April record high of $3 500.05, with prices gaining around 4% over the week. US gold futures settled 1.50% higher at $3 452.80.

Daniel Pavilonis, senior market strategist at RJO Futures, noted that Israel’s strikes on Iranian targets have fuelled geopolitical unease, keeping gold prices elevated in anticipation of possible retaliation. The strikes reportedly targeted Iran’s nuclear facilities and missile production sites, as part of what Israeli officials suggest could be a sustained campaign to prevent Iran from acquiring nuclear weapons. President Trump attributed the escalation to US demands aimed at curbing Iran’s nuclear programme.

Adding to gold’s appeal, softer US inflation data reinforced expectations of interest rate cuts by the Federal Reserve. As a non-yielding asset, gold tends to benefit from a low-interest rate environment and heightened global uncertainty.

Major financial institutions remain bullish on gold’s outlook. Goldman Sachs has reiterated its forecast for gold to reach $3 700 per ounce by the end of 2025 and $4 000 by mid-2026, citing strong central bank demand. Similarly, Bank of America expects prices to rally to $4 000 within the next year.

However, physical demand in key Asian markets has softened due to elevated prices and higher local interest rates, with gold in India exceeding the 100 000-rupee mark. Earlier in the week, spot gold briefly dipped over 1% before rebounding.

Tim Waterer, chief market analyst at KCM Trade, observed that gold prices are being driven by alternating fears of escalation and hopes for de-escalation in the Middle East, contributing to market volatility. Israel’s strikes reportedly damaged Iran’s state broadcaster and caused severe destruction at the country’s largest uranium enrichment facility, according to the United Nation nuclear watchdog.

Looking ahead, investor focus is shifting to the US Federal Reserve meeting. While rates are expected to remain unchanged, markets will be closely watching Chair Jerome Powell’s guidance on the potential for future cuts, with current expectations pointing to two reductions by year-end.

In the short term, gold’s safe-haven status remains firmly supported by ongoing geopolitical tensions and economic uncertainty, with prices likely to test previous highs near $3 500.

Gold historical data 6-month view

Bottom Line

Portfolios are constructed in a diversified manner to shield against temporary shocks of this nature. Any exposure to gold, oil and the dollar supports the portfolio while some of the other counters or assets experience volatility.

Macroeconomics in brief