Gold (GC=F) futures pared gains after trading as high as $5,400 per ounce on Monday as a widening conflict in the Middle East drove investors toward safe-haven assets.
JPMorgan analysts expect a “risk premium” jump in gold prices in the near-term of more than 5% to 10% in the aftermath of US-Israel strikes on Iran over the weekend and counterattacks in the region.
However, those geopolitical price spikes “can be sharp but hard to sustain,” the analysts said.
Gains could reverse if the conflict eases or equity market losses prompt investors to sell assets to cover losses or raise cash. On Monday, US stocks opened lower.
Read more: How to protect your money during turmoil, stock market volatility
Despite the potential for short-term volatility, JPMorgan forecasts demand from central banks and investors will ultimately push gold prices to $6,300 per ounce by the end of 2026.
“A near-term boost in geopolitical risk premium is clearly aligned with our bullish view on gold, but it is far from the sole reason we remain structurally bullish on the metal,” JPMorgan’s Patrick Jones wrote.
A prolonged conflict could highlight longer-term drivers of gold prices, such as rising deficits and the risk of a deteriorating economic backdrop if higher oil prices persist.
On Monday, gold traded roughly $200 below the all-time high set in January, after closing out its eighth straight month of gains.
The move pushed gold’s year-to-date gains to 21%, which came as central bank purchases, lower interest rates, and a weaker dollar have driven up demand.
Read more: Thinking of buying gold? Here’s what investors should watch for.
“With a few notable exceptions, 2026 is looking like 2025 on steroids,” Robin Brooks, senior fellow at the Brookings Institution, wrote over the weekend.
The rest of the metals complex reversed recent gains on Monday as silver (SI=F) futures dropped 3%. The metal is still up 17% year to date. Palladium (PA=F) and platinum (PL=F) also pulled back as the US dollar (DX-Y.NYB) firmed. Both metals are still positive for the year.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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