The price of gold climbed sharply on Monday as investors across the world responded to the escalating military conflict in the Middle East by seeking the security of safe-haven assets. Gold rose 2.5% to $5,408 an ounce, reflecting the depth of concern among market participants about the economic and geopolitical risks posed by the widening conflict.
Gold is traditionally viewed by investors as a store of value during periods of uncertainty and crisis. Its rise on Monday mirrored a broader pattern of flight-to-safety behaviour, with stock markets falling sharply across Europe, Asia, and the United States. The combination of disrupted energy supplies, blocked shipping lanes, and an uncertain military outlook prompted investors to reduce their exposure to riskier assets and seek refuge in gold and other perceived safe havens.
The immediate triggers for the market turmoil were multiple and compounding. Qatar’s state energy company suspended LNG production at its major facilities following drone attacks, threatening to remove nearly 20% of global LNG supply. The Strait of Hormuz faced effective closure, cutting off roughly a fifth of global oil supplies. Iran reportedly warned tankers against entering the strait, and two vessels were attacked. Shipping giant Maersk suspended transits through both the Strait of Hormuz and the Suez Canal.
Gas prices surged 40% or more in a single trading session, and oil prices hit 14-month highs. Stock markets fell broadly, with declines of between 1% and 2.6% recorded across major European indices. Aviation stocks were among the worst performers, while defence shares rose on expectations of increased military spending. Oil companies also gained as the surge in crude prices boosted their earnings outlook.
Analysts noted that the scale of the disruption — simultaneously affecting gas supply, oil shipping, and two of the world’s most important maritime trade routes — was exceptional. With no clear sign of an early end to the military operations, the uncertainty driving investors toward gold and away from equities was unlikely to dissipate quickly. For investors weighing their options, the traditional appeal of gold as a crisis hedge appeared as strong as ever.