On Monday, gold surged more than 2% as U.S. and Israeli airstrikes on Iran expanded with no clear end in sight, intensifying concerns over broader geopolitical and economic uncertainty and triggering a wave of safe-haven inflows. Spot gold briefly broke above $5,400 per ounce, extending an eight-month winning streak.

Following the strikes, Iran retaliated against Gulf cities hosting U.S. military bases, disrupting regional air travel and blocking oil and refined product tankers from transiting the critical Strait of Hormuz.

JPMorgan expects that after the U.S.–Israel strikes and subsequent retaliation, the near-term geopolitical risk premium in gold could jump by more than 5% to 10%. However, while such conflict-driven price spikes can be sharp, they are often difficult to sustain. If tensions ease, or if equity market declines force investors to liquidate assets to cover losses or raise cash, the rally could reverse.

Despite potential short-term volatility, JPMorgan believes that central bank and investor demand will ultimately push gold toward $6,300 per ounce by the end of 2026.

A prolonged conflict could further highlight gold’s structural drivers, including rising fiscal deficits and persistently high oil prices that could weaken economic outlooks.

Monday’s rally lifted gold’s year-to-date gains above 20%, supported by central bank buying, declining interest rates, and a weaker U.S. dollar. With few major exceptions, 2026 is shaping up to resemble an intensified version of 2025.

The current environment remains highly uncertain. Escalating tensions in the Middle East have reinforced bullish sentiment in the gold market, providing support amid heightened financial market volatility and enhancing portfolio stability.

Market Interpretation:

On the four-hour chart, gold is consolidating at elevated levels, with MACD lines and histogram converging above the zero axis. Last week, BNP Paribas raised its 2026 gold price forecast by 27% to $5,620 per ounce and projected that sustained macroeconomic and geopolitical uncertainty could drive prices above $6,250 by year-end.

Investors will closely monitor a series of U.S. labor market data releases this week, including the ADP employment report, weekly initial jobless claims, and the nonfarm payroll report.