Gold and silver prices rallied sharply in early U.S. trading Monday, climbing to four-week highs as investors rushed toward safe-haven assets amid the most severe Middle East conflict in decades.
April gold futures jumped $159.40 to trade at $5,406.80, while March silver rose $2.038 to $94.71.
The surge comes as geopolitical tensions escalate dramatically following expanded U.S.-Israeli military action against Iran.
Middle East Conflict Escalates
Recent developments include continued U.S.-Israeli strikes across the region, reports that Iran’s Supreme Leader has been killed, and intensified cross-border attacks involving Hezbollah. Saudi Aramco halted operations at its largest refinery after a nearby drone strike, while dozens of oil tankers remain stranded as the Strait of Hormuz is effectively shut down.
Global equity markets fell sharply, while crude oil, the U.S. dollar, and gold advanced. President Trump said the military campaign could last several weeks but remains ahead of schedule. Iran has stated it will not negotiate with Washington, further deepening uncertainty.
Markets Reprice Interest Rate Expectations
Money markets adjusted their interest-rate outlook as rising oil prices fanned inflation concerns. According to Bloomberg, the probability of the Federal Reserve cutting rates three times in 2026 has dropped to 20%, down from nearly 50% just a week ago.
Traders no longer expect the Bank of England to deliver three rate cuts this year, and expectations for a March reduction fell to 60% from over 80%. Markets have also halved expectations for European Central Bank easing, pricing just five basis points of cuts.
Two-year bond yields in the U.S., U.K., and Germany rose more than longer maturities, signaling a sharp shift in inflation expectations driven by surging energy costs.
U.S.-China Relations Face New Strain
The geopolitical fallout could complicate diplomatic efforts ahead of a planned summit between President Trump and Chinese President Xi Jinping in China. Beijing condemned the killing of Iran’s leader, with China’s foreign minister warning that regime change efforts risk pushing the Middle East into deeper instability.
The situation adds complexity to already fragile global trade and diplomatic relations as markets brace for extended geopolitical uncertainty.
OPEC+ Moves to Increase Output
OPEC+ agreed to accelerate production increases, with Saudi Arabia and Russia leading an output boost of 206,000 barrels per day starting in April.
However, markets remain skeptical that additional supply will offset potential disruptions. Several producers have limited spare capacity, and export routes remain vulnerable if the Strait of Hormuz continues facing restrictions.
Broader Market Snapshot
The U.S. Dollar Index climbed to a five-week high, crude oil surged to an eight-month high near $72.00 per barrel, and the benchmark 10-year U.S. Treasury yield stood at 3.96%.
Elevated energy prices and geopolitical uncertainty continue to reinforce gold’s appeal as a traditional hedge against volatility and inflation.
Gold Market Structure
Gold trades through two primary pricing mechanisms: the spot market, which reflects immediate delivery pricing, and the futures market, which sets prices for delivery at a future date. Due to positioning and liquidity shifts, the December gold futures contract is currently the most actively traded on the CME.
Technical Outlook: April Gold Futures
The next upside objective for bulls is a close above strong resistance at the contract high of $5,626.80. Bears aim to push prices below major support at $5,000.00.
First resistance is seen at $5,434.10, followed by $5,500.00. Initial support appears at $5,315.30, then $5,300.00.
Wyckoff’s Market Rating: 8.0
Technical Outlook: March Silver Futures
Silver bulls are targeting a close above key resistance at $100.00. The next downside objective for bears is a close below solid support at the February low of $71.815.
First resistance stands at $95.86, then $100.00. Support is seen at $92.335, followed by $90.00.
Wyckoff’s Market Rating: 7.0
