Gold climbs to three-month high as Middle East tensions, policy uncertainty drive safe-haven demand Gold rallied to its highest level in over three months on Tuesday, pushed higher by lingering conflict in the Middle East and political and economic uncertainty in the US. The metal—which investors traditionally treat as a safe haven—rose about 15% in August, peaking at $4,651 an ounce (£3,410) during Asian trading before easing back slightly. That moves gold toward its strongest monthly gain since September 1999. What’s driving the surge - Geopolitical risk: Early-August hopes for a US-Iran ceasefire and a reopening of the Strait of Hormuz never materialized, and continued hostilities have kept safe-haven flows alive. - Macro uncertainty: Markets are nervously awaiting US inflation data and a high-profile speech by new Fed chair Kevin Warsh, while bond-market jitters around inflation and concern over President Donald Trump’s tax and spending plans have added to demand for havens. - Policy shifts and trade risk: The gold rally that began in 2025 followed tariff announcements by Trump that stoked fears of global trade disruption. More recently, fresh US tariffs on cars and key raw materials from Canada and threats of sanctions on entities trading with Iran have added to the backdrop of uncertainty. Market views Tony Sycamore, market analyst at IG, expects any pullbacks to be well supported, forecasting gold could push toward resistance in the $4,900–$5,000 range. Swissquote senior analyst Ipek Ozkardeskaya says investors are buying gold as a hedge against unclear US fiscal plans, inflation risk (and questions over the Fed’s independence), and broader worries tied to the tech and AI boom. Gold’s recent path and the odd pullback The long-term rally accelerated in late 2024–2025: gold topped $4,000 an ounce for the first time last October, passed $5,000 in January and hit a record later that month amid policy shifts and political uncertainty in other major economies. Still, the metal briefly retreated earlier this year to as low as $3,942 in late June. Analysts say that while war generally boosts gold, the same tensions have pushed oil and inflation expectations higher—factors that can drive rate-hike expectations and weigh on gold’s appeal—helping explain the counterintuitive dip. Crypto crossflows: bitcoin also rallies Crypto markets mirrored some of the safe-haven flows: bitcoin climbed above $80,000 (£58,680) on Tuesday, a three-month high. Analysts linked the move to a softer US dollar and many of the same macro forces lifting gold, underscoring how macro uncertainty can lift both traditional and crypto stores of value. Bottom line A mix of sustained geopolitical risk, fiscal and monetary policy uncertainty, and weakening dollar dynamics has pushed both gold and bitcoin to multi-month highs. Traders will be watching US inflation data and Kevin Warsh’s remarks for cues on whether the rally can be sustained or if rates and dollar strength could cap further gains. Read more AI-generated news on: undefined/news