Gold extends rally, jumps over 2% as US-Iran tensions flare

Gold prices extended gains on Wednesday on safe-haven appeal, as renewed geopolitical tensions between the US and Iran added to the yellow metal’s recent upswing that saw it mark its best day since 2008 in the previous session.

Spot gold gained 2.7% to $5,071.79 per ounce as of 0353 GMT, after surging 5.9% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.

US gold futures for April delivery climbed 3.2% to $5,092.0 per ounce.

“Gold has climbed back about the key $5,000 level, … (as) geopolitical tensions have lifted the metal’s safe-haven appeal after US forces downed an Iranian drone,” said Jigar Trivedi, a senior research analyst at IndusInd Securities.

The US military on Tuesday shot down an Iranian drone that “aggressively” approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said, in an incident first reported by Reuters.

Nuclear talks between the US and Iran are expected to take place in Oman on Friday, Axios reporter Barak Ravid said on Tuesday, citing an Arab source.

Elsewhere, US President Donald Trump on Tuesday signed a spending deal into law that ends a partial U.S. government shutdown which had delayed key labour data reports that were due for release this week.

Investors expect at least two Fed interest rate cuts in 2026 and await ADP private payroll data later in the day for more cues on the Fed’s policy path. Non-yielding bullion tends to perform better in low-interest-rate environments.

“Going ahead (gold) prices may touch $5,100 in the very near-term … and we are expecting the same $5,600 levels by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is $6,000/oz,” Trivedi added.

The current wave is expected to be sharp, probably to surge into the $4,950 to $5,198 range, Reuters technical analyst Wang Tao said on Tuesday.

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