Gold price hits three-month high as Iran conflict and Trump economic policy fuel uncertainty
Gold prices reached their highest level in more than three months on Tuesday, driven by ongoing Middle East tensions and uncertainty over US economic policy. Analysts expect the rally to continue in the near term.
Gold reached $4,651 an ounce during Asian trading hours on Tuesday before easing slightly, marking its highest price in over three months. The metal has gained roughly 15% during August alone, putting it on pace for its strongest monthly performance in nearly three decades — since September 1999.
Investors typically treat gold as a safe-haven asset, meaning its value tends to climb when political or economic uncertainty rises. The current rally began in early August amid hopes that the US and Iran were nearing a ceasefire and a reopening of the strait of Hormuz. That breakthrough never materialised, yet gold has kept climbing regardless.
Drivers behind the rally
The latest gains come as markets await fresh US inflation figures and a closely watched address from new Federal Reserve chair Kevin Warsh, against a backdrop of bond-market unease over inflation and Donald Trump's tax and spending agenda. Tony Sycamore, a market analyst at broker IG, said buyers are likely to keep supporting the price on its path toward the next resistance level of $4,900 to $5,000.
Similar dynamics are playing out in cryptocurrency markets: bitcoin climbed above $80,000 on Tuesday, its highest level in three months, which analysts linked to a weakening US dollar.
The bigger picture
The present surge is part of the biggest gold rally since the 1970s, which began in 2025 after Trump first unveiled tariffs on imported goods. Gold first broke $4,000 an ounce last October and topped $5,000 in January, hitting a record high at month's end. However, the price unexpectedly fell back to $3,942 in late June despite the ongoing Middle East conflict, which analysts attributed to higher oil prices and inflation expectations offsetting gold's safe-haven appeal.
The situation is further complicated by Trump's newly announced tariffs on cars and raw materials from Canada, along with US threats of severe sanctions against countries maintaining economic ties with Iran.
