Gold price climbs as Iran conflict escalates
The price of gold has returned to close to all-time highs following the outbreak of hostilities in the Middle East
The gold price opened 2.1% higher on Monday 2 March following US and Israeli strikes on Iran and the retaliatory fallout.
“Investors are scuttling towards safe havens, seeking shelter as conflict widens in the Middle East,” said Susannah Streeter, chief investment strategist at investment service Wealth Club.
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Last year was the best year for gold price gains since the 1970s, and the price of gold made a strong start to 2026, registering its all-time high on 29 January. The gold price rose 24% during the first 29 days of 2026.
The precious metal’s dramatic gains earlier this year had many observers wondering if the gold price could rise to $6,000 during 2026, crashing through the $5,000 threshold – then $5,500 – in the process.
A sharp selloff then followed, driven largely by US president Donald Trump’s pick of Kevin Warsh as the next chair of the US Federal Reserve (Fed). Many had expected Rick Rieder, a monetary dove. Looser Fed policy is typically positive for gold prices, so the relatively hawkish Warsh would have been a relative negative for gold prices compared to what markets had anticipated.
Why are gold prices rising again?
Throughout February, tensions between Trump and Iran have escalated.
Whenever geopolitical tensions escalate, gold prices tend to rise. Investors typically view gold as a hedge against the kind of disruption that can result from conflicts.
Having finished January with sharp declines, gold prices stabilised in February, trading a little above or below $5,000 for most of the month.
What was a simmering pot boiled over on 28 February when a joint US/Israeli operation launched strikes against Iran, before killing the country’s supreme leader Ayatollah Ali Khamenei.
The war in the Middle East that many had feared for weeks had started.
“Precious metals prices have ratcheted up again, with gold and silver increasingly sought after in these turbulent times,” said Streeter. “Gold has reached a one-month high, after recording its seventh consecutive monthly gain in February – the best winning streak since 1973.”
Think you know your gold? Test your knowledge in our gold quiz here.
Could the gold price keep rising?
The most recent gold price surge could continue if the conflict in the Middle East escalates or carries on.
“Back [in 1973], a severe oil shock led to a flight to safe havens,” Streeter continued. The most recent oil price hike isn’t yet on that same scale, with prices having quadrupled within months back then.
But a major disruption to global oil supplies could see a similar scenario play out.
“With tensions escalating and uncertainty so high, it is far from clear how this current conflict will evolve, and prices could climb even higher,” said Streeter.
How to gain exposure to gold prices
If you are considering where to invest for 2026 and want to add some gold exposure, there are three main approaches.
The first one is investing in the metal itself through a financial contract, such as an ETF or exchange-traded commodity (ETC).
Investments into these kinds of products are another factor helping to support gold prices this year.
“European investors are getting involved, having added over $6.5 billion to gold ETCs in 2025 alone, reversing the outflows of 2024,” said Tom Bailey, head of research at HANetf.
See our article on the best gold ETFs for more information.
You can also get indirect exposure by investing in the miners that dig gold out of the ground. This can be done by investing directly in their shares, or by buying a gold fund or investment trust.
Lastly, you can buy physical gold bars or gold coins.
In terms of how much gold to hold in a portfolio, Tom Stevenson, investment director at Fidelity International, suggests around 5-10% is a good amount – which is about the same as you might hold in cash.
“The two offer insurance and dry powder to complement the growth and stability of the shares and bonds that make up the bulk of a balanced portfolio,” he comments.
