Investing.com — Following the Monday rally, retreated on Tuesday as a firmer outweighed safe-haven demand linked to the escalating U.S.-Israeli air campaign against Iran, even as geopolitical risks remained high.
Spot gold slipped 2.5% to $5,191 an ounce by 12:20 GMT, while April fell 2.3% to $5,188. The dollar climbed to its highest level in more than a month, supported by steady demand and cautious market sentiment.
The pullback comes after spot gold prices surged to $5,419 on Monday, the highest level since January 30.
Because gold is priced in , a stronger U.S. currency typically makes the metal more expensive for holders of other currencies, weighing on prices.
Meanwhile, shipping costs for oil and gas surged after an official from Iran’s Islamic Revolutionary Guard Corps (IRGC) said the Strait of Hormuz had been closed to marine traffic and warned that any vessel attempting to pass would be targeted. The move added to inflation concerns and broader market uncertainty.
But despite the latest pullback, many analysts remain constructive on gold’s outlook. Max Baecker, president of American Hartford Gold, said the market’s initial reaction to the weekend escalation was “textbook,” noting that direct U.S. and Israeli strikes and reports surrounding Ayatollah Ali Khamenei’s death prompted an immediate repricing of risk.
“Gold did exactly what it’s designed to do in moments like this,” he told Investing.com, pointing to the more than $100 surge into the $5,390–$5,400 range as evidence of institutional safe-haven demand.
“When markets start pricing credible risk to the Strait of Hormuz and global energy supply, capital moves quickly, and gold responds in real time,” he added.
Baecker said a 2–3% jump is typical in similar geopolitical episodes, but the key question now is whether the move proves sustainable. If tensions broaden or energy infrastructure risks persist, he said, levels around $5,450 could be reached quickly.
Conversely, a cooling in the conflict could see consolidation toward the $5,250–$5,300 range, particularly if real yields remain firm.
Looking further out, Baecker argued gold’s longer-term backdrop was already supportive before the latest crisis, citing sovereign debt expansion, continued central-bank buying and gradual de-dollarization trends. “Geopolitics simply accelerates trends that were firmly in place,” he wrote.
Asked whether gold could reach $6,000 in the near term, Baecker said that from the $5,400 level the metal hit yesterday, “a move to $6,000 would represent about an 11% gain” and is “not an aggressive projection” under a scenario of sustained geopolitical stress layered on fiscal pressures and ongoing sovereign accumulation, he said.
However, he noted that such a move would require continued follow-through, adding that without further escalation the $6,000 level is more likely a 2026 milestone than an immediate target.