Middle East conflict escalation and dollar weakness drive gold prices higher

LootboxPhobia · 2026-03-05T04:51:02+00:00

On Thursday during the Asian trading session, gold prices rose due to escalating Middle East conflicts and a weakening dollar. Spot gold increased by 0.8% to $5,179.60, while the US dollar index declined. Geopolitical tensions have prompted investors to seek safe-haven assets, and gold prices are expected to remain supported in the short term. Other precious metals such as silver and platinum also saw gains.

LootboxPhobia

2026-03-05 04:51:02

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Investing.com - On Thursday during Asian trading hours, gold prices rose as escalating Middle East conflicts prompted investors to seek safe-haven assets, and a weaker dollar also provided additional support for gold.

As of 21:09 Eastern Time (02:09 Beijing Time), spot gold increased by 0.8% to $5,179.60 per ounce. U.S. gold futures fell by 0.3% to $5,188.29.

Gold had gained 1% in the previous trading day. This rebound came after a nearly 5% decline on Tuesday, triggered by a strengthening dollar.

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Escalating Middle East Tensions; U.S. Sinks Iranian Warship

Geopolitical tensions escalated after the U.S. sank an Iranian warship in international waters. Iran continues to launch missiles at multiple countries in the region and reportedly targeted critical energy infrastructure.

The conflict has deepened concerns about ongoing regional warfare, prompting investors to reduce exposure to risk-sensitive assets and flock to gold. Gold has traditionally been viewed as a hedge against geopolitical instability and market turbulence.

Adding to the uncertainty, Tehran dismissed a report claiming its intelligence agency contacted Washington to negotiate an end to the conflict, calling it “pure lies.”

Dollar Retreats After Strong Rally

The dollar index traded flat after falling 0.3% overnight. The index had surged for two consecutive trading days earlier this week.

A softer dollar makes gold more attractive to investors holding other currencies.

Meanwhile, President Trump officially nominated Kevin Warsh as the next Federal Reserve Chair, a move market analysts see as favorable for rate cuts.

Analysts suggest that with little sign of easing in Middle East tensions, coupled with ongoing uncertainties in global growth and energy markets, gold may continue to find support in the short term as investors seek safe havens amid volatility.

In other precious metals, silver rose 1.4% to $84.72 per ounce, and platinum increased 1.6% to $2,196.60 per ounce.

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