Gold surges past $4,600 as US-Iran standoff escalates

Gold prices rose above $4,600 per ounce on Friday, hitting a three-month high as escalating tensions between the United States and Iran drove investors toward safe-haven assets. The precious metal climbed more than 2% on the day, with prices reaching $4,622 per ounce, as stalled peace negotiations and threats of military escalation in the Strait of Hormuz rattled global markets.tradingeconomics

US-Iran Standoff Fuels Safe-Haven Demand

The rally follows a week of deteriorating diplomacy between Washington and Tehran. A memorandum of understanding between the two sides expired on August 17, with President Donald Trump rejecting an extension and telling Iran to "put up the white flag of surrender," according to Al Jazeera. A senior Iranian official told Reuters that Iran would shift to a "fully offensive" military posture in the Strait of Hormuz if the U.S. failed to implement an interim peace deal.Reuters+1

The standoff has already disrupted shipping through the strait. Only six commodity vessels crossed on Tuesday, down from the 10-day average of 11, according to Kpler data cited by Reuters. The UAE suspended all trade and financial dealings with Iran on August 19, intensifying economic pressure on Tehran. Oil prices have climbed in response, with Brent crude futures trading above $91 a barrel, adding to broader market unease that has pushed investors toward gold.CNN+3

Hong Kong Exchange Sees Record Gold Deliveries

Separately, Hong Kong Exchanges and Clearing reported record-breaking physical gold deliveries on its US dollar-denominated gold futures contract. The exchange physically delivered 145 kilograms of gold on Wednesday, more than doubling the previous single-day record of 63 kilograms set in December 2018, according to the South China Morning Post.scmp

HKEX relaunched the contract on July 6 — its fourth attempt since the 1980s to establish a viable gold futures market. Since the relaunch, average daily trading volume has reached 9,974 contracts with a notional value of about $1.35 billion. The surge underscores Hong Kong's ambitions to become a global hub for precious metals as US sanctions reshape international trade flows.thestandard

Outlook Tied to Geopolitical Developments

Gold has gained more than 36% over the past year, driven by a combination of geopolitical risk, central bank purchases, and investor demand for portfolio protection. "Gold futures can help to hedge price risk for investors and leveraged exposure without holding physical metal," said Tom Chan Pak-lam, honorary president of Hong Kong's Institute of Securities Dealers. With US-Iran negotiations at an impasse and shipping through the Strait of Hormuz under threat, the conditions that have propelled gold's advance show few signs of easing.scmp+1