Gold Rallies on Iran-Israel Escalation as Investors Seek Safety

Gold prices increased on Tuesday as tensions between Israel and Iran drove investors toward safe-haven assets. Spot gold rose 0.1% to $3,386.29 per ounce. The conflict has escalated to concerning levels, with Jordan’s King Abdullah warning of global threats. Meanwhile, investors are watching the Federal Reserve’s upcoming policy meeting on Wednesday, with expectations of potential rate cuts later this year. Despite the current gains, Citi has lowered its gold price forecasts, predicting prices could fall below $3,000 by late 2025.

WGC Survey: 76% of Central Banks Plan to Boost Gold Reserves

A World Gold Council survey of 73 central banks reveals a major shift in global reserve preferences. 76% of central banks expect to increase their gold holdings over the next five years, while nearly three-quarters anticipate reducing their dollar reserves. This trend reflects gold’s appeal as a crisis hedge and portfolio diversifier amid geopolitical tensions. Central banks have bought over 1,000 metric tons of gold annually for the past three years—double the previous decade’s average—despite gold prices hitting record highs above $3,500 per ounce.