ING’s commodities strategists Ewa Manthey and Warren Patterson say Gold is pushing higher as markets react to escalating tensions between the US, Israel and Iran. They stress that Gold’s safe-haven role is reinforced by contained real yields, strong central bank buying and expectations of policy easing, suggesting any downside should be limited even if tensions stabilise.

Safe haven demand underpinned by risks

"Gold is pushing higher on Monday as markets reopen to the weekend’s escalation between the US, Israel and Iran. Renewed tensions inject a fresh geopolitical risk premium at a time when investor positioning was already constructive."

"This reinforces gold’s role as a preferred hedge. Near-term price action is likely to remain headline-driven, with volatility elevated."

"If higher crude prices lift inflation expectations, while growth risks rise, real yields are likely to remain contained – and supportive for gold. A firmer dollar, however, could slow the pace of gains."

"A regional spillover or disruption to energy supplies would materially boost gold through higher oil prices, increased inflation expectations and contained real yields. Sustained uncertainty would keep volatility and safe-haven demand elevated. By contrast, if tensions remain contained and energy flows are unaffected, the initial risk-off move should fade as the oil risk premium unwinds."

"This reinforces, rather than changes, the broader gold narrative. Central bank buying remains strong and expectations of policy easing later this year continue to underpin the market. Even if tensions stabilise, these structural drivers suggest downside should be limited, with any pullbacks likely to be shallow rather than trend-reversing."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)