Gold prices rallied sharply in early trading, approaching a three-week high after US President Donald Trump agreed to a temporary suspension of planned military strikes on Iran, prompting investors to reassess near-term geopolitical and inflation risks.
Spot gold climbed 2.5% to $4,819.25 per ounce as of 0534 GMT, after rising more than 3% earlier in the session to its strongest level since March 19. Meanwhile, US gold futures for June delivery advanced 3.5% to $4,847.70.
The move reflects a classic flight to safety, with investors shifting toward bullion amid lingering uncertainty despite the pause in hostilities. While the decision to halt attacks has eased immediate fears of a wider regional escalation and energy supply disruption, markets remain cautious about the durability of the de-escalation.
Analysts note that gold continues to draw support from a combination of geopolitical tension, inflation expectations, and volatility in global markets. Even a temporary reduction in conflict risk has not fully restored confidence, keeping safe-haven demand elevated.
The price action underscores a broader market reality: risk sentiment remains fragile, and any shift in geopolitical posture, whether escalation or restraint, continues to have an outsized impact on commodities and investor behavior.