Gold climbed to a one-month high on Monday as escalating conflict between the United States and Iran triggered a fresh wave of safe-haven buying, reinforcing bullish forecasts from major banks that see the metal heading toward record territory, Mining Zimbabwe can report.
By Ryan Chigoche
Spot gold surged as much as 2.9% to trade above US$5,400 an ounce, its strongest level since the late-January sell-off, before trimming gains as US markets opened.
The rally builds on a year in which bullion has already advanced nearly 25% in the first two months, underscoring sustained investor appetite for defensive assets.
The latest leg higher follows military strikes by the US and Israel on Iran that reportedly killed Iran’s Supreme Leader, Ali Khamenei. Tehran’s retaliatory missile attacks across the region have raised fears of a broader and prolonged war, prompting investors to reduce exposure to risk assets and rotate into gold.
Beyond sentiment, the conflict carries tangible implications for physical bullion trade.
The United Arab Emirates, particularly Dubai, is one of the world’s most important gold trading and transit hubs. Large volumes of bullion pass through Dubai en route from London, the dominant over-the-counter trading centre, to key consuming markets such as India and China.
Airspace restrictions and suspended flights in the Gulf have temporarily disrupted cargo flows, complicating logistics for traders.
While the interruptions are expected to be short-term, any prolonged disruption to flights through Dubai could tighten supply in Asian markets and add further upward pressure to prices.
The renewed surge in bullion strengthens the case made by major financial institutions that gold could revisit — and potentially exceed — record highs.
Bank of America expects prices to reach US$6,000 an ounce within the next 12 months, citing geopolitical instability and continued central bank buying. JPMorgan has raised its long-term forecast to US$4,500 an ounce and maintained a year-end target of US$6,300.
For Zimbabwe, where gold remains the country’s largest single foreign currency earner, sustained prices above US$5,000 per ounce would significantly enhance export receipts and producer margins.
A move toward the US$6,000 mark, if realised, could further stimulate exploration spending and production growth across the sector.
For now, the market remains focused on whether the conflict escalates further. But with bullion sitting at a one-month high and global banks projecting record levels, gold’s safe-haven status is once again driving momentum, and the war in the Middle East may yet prove a catalyst for the next leg higher.
