Gold and oil surge after US bombing of Iran, as funds seek haven amid higher energy costs
The prices of gold and oil increased as the world waited for Iran's response after the US joined the Israeli assault on the Islamic Republic over the weekend, risking a wider war that could push up energy prices.
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The precious metal climbed as much as 0.8 per cent, before paring most of that gain, after the US struck Iran's three main nuclear sites. That spurred a flight to havens like the dollar and gold on Monday.
Oil prices jumped sharply on fears that Tehran could attack Middle Eastern energy infrastructure or threaten shipping in the Strait of Hormuz. West Texas Intermediate, the US oil benchmark, rose about 2.5 per cent after surging as much as 4.6 per cent in opening trade. The US dollar climbed against the euro and most major peers, while US equity futures declined.
'The key theme will be volatility - the moves might not stick if, for example, [US President Donald] Trump decides the strikes are done,' said Nick Twidale, chief analyst at AT Global Markets. 'Trump has the bigger stick compared with Tehran, and as such his next move, be it a further escalation or heading back to the negotiating table, will matter more for markets.'
The dealing room of Hana Bank in Seoul on June 23, 2025. Photo: EPA-EFE
The escalation of hostilities has given fresh impetus to a rally that is pushed gold up almost 30 per cent so far this year. While the chances of an expanding conflict are supporting haven assets, a sustained rise in energy prices would spur inflation and make interest rate cuts less likely, a negative for bullion that doesn't offer any interest.
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