Gold prices soared on Friday as investors flocked to safe-haven assets following Israeli airstrikes on Iran, re-igniting fears of a broader conflict in the Middle East.
Spot gold rose 1.3 percent at $3,428.10 an ounce, coming within striking distance of its record high of $3,500.05 set in April. Prices gained about 4 percent so far this week.
US gold futures settled 1.5 percent higher at $3,452.80.
“Israel knocking out Iranian targets is causing a little bit of geopolitical scare in the market. Prices will stay elevated in the anticipation of what is to come, the retaliation by Iran,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Israel launched a barrage of strikes across Iran on Friday, saying it had attacked nuclear facilities and missile factories and killed military commanders in what could be a prolonged operation to prevent Tehran from building an atomic weapon.
US President Donald Trump suggested that Iran had brought the attack on itself by resisting a US ultimatum in talks to restrict its nuclear program.
Softer US inflationprints earlier this week added extra shine to gold, bolstering expectations of interest rate cuts by the Federal Reserve.
Bullion is widely regarded as a safe asset, especially during times of economic turmoil and geopolitical unrest. It also tends to thrive in a low interest rate environment.
