KUALA LUMPUR, March 1 — The ongoing attack against Iran by the United States and Israel has driven investors toward safe-haven assets, pushing global gold prices up to US$5,500 per ounce, said an analyst.
SPI Asset Management managing partner Stephen Innes said bullion did not ease into the weekend; instead, it reacted immediately when reports confirmed that US fighter jets had landed in Israel.
He said the development marked the moment the geopolitical narrative shifted from rhetoric to a visible military posture, a signal that markets tend to price in rapidly.
“With Friday’s close of US$5,278.51 per ounce, gold had already moved ahead of the early escalation risk. History shows that in supply-shock-driven episodes, such as the Strait of Hormuz closure or the targeting of Middle East oil infrastructure, gold tends to move in tandem with crude oil.
“Typically, gold rises by about 0.20 to 0.35 per cent for every one per cent gain in oil prices. Applied to current levels, which (gold) are approximately trading at an upside of US$125-US$220, placing a US$5,400-US$5,500 (projection) handle well within statistical reach if crude oil confirms sustained disruption risk or even a US$10 added gap open,” he told Bernama.
Innes said the precious metal is not chasing oil for growth optimism; it is reacting to what crude oil implies about inflation expectations, real yields, and systemic stress.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing escalations in the Middle East are weakening the US dollar’s position as a safe-haven currency, giving gold and other precious metals a slight advantage.
He said precious metals such as gold would be the best alternative, or substitute, for safe-haven instruments, as their value is not tied to politics.
“Despite the slight advantage, it is going to be risk-off mode, especially in the global equities market,” he said.
Domestically, Mohd Afzanizam said the higher gold prices have a positive effect on the Ar Rahnu business.
“The collateral value will rise, and this will help improve access to finance, especially among the micro, small and medium enterprises (MSMEs) to fund their working capital,” he added.
The price of physical gold was fixed at US$5,167.35 per troy ounce at the London Bullion Market Association afternoon fix on Feb 26, 2026.
On Saturday, reports said Israel launched airstrikes against sites inside Iran, marking a sharp escalation in the conflict.
US President Donald Trump stated that the US had initiated “major combat operations in Iran,” confirming its direct involvement alongside Israel.
The strikes came after a substantial US military build-up in the region designed to pressure Tehran over its nuclear activities, amid ongoing large-scale protests.
