Gold prices surged to a new all time high above $5,500 on Thursday as investors rushed toward safe haven assets following a fresh escalation in geopolitical tensions driven by President Donald Trump’s renewed threats of military action against Iran. The rally in precious metals came as oil prices climbed and equity markets across Asia retreated, reflecting a sharp shift in global risk sentiment.
Bullion jumped by more than $300 at one point, reaching a peak of $5,588.71, as markets reacted to Trump’s warning that Tehran must urgently return to negotiations over its nuclear programme. Western powers have long suspected Iran’s programme is aimed at developing nuclear weapons, a claim Tehran denies. Trump, writing on his Truth Social platform, urged Iran to strike a deal quickly, stressing that time was running out and cautioning that any further confrontation would trigger a far more severe response than previous US strikes carried out in June.
The tensions were reinforced by reports that a major US naval strike group, led by the aircraft carrier USS Abraham Lincoln, has been deployed to Middle East waters. Trump described the force as fully prepared to act with speed and overwhelming force if ordered. CNN reported that the White House was weighing military options after nuclear talks stalled. Iran’s foreign minister, Abbas Araghchi, responded by warning that Iranian forces were on high alert and would retaliate immediately against any US military action, while leaving open the possibility of renewed diplomatic engagement.
The rush into gold was amplified by a softer dollar, amid growing speculation that Trump is comfortable with a weaker US currency. The dollar slid against most major peers, even after Treasury Secretary Scott Bessent reiterated that Washington officially maintains a strong dollar policy. Market confidence has also been shaken by Trump’s recent tariff threats and broader uncertainty around US economic strategy.
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Silver also touched a fresh high, underlining the scale of demand for hard assets. Analysts said the move in gold reflected deeper concerns beyond short term inflation or interest rate expectations. Stephen Innes noted that gold was increasingly behaving less like a traditional commodity and more like a barometer of trust in policymaking, suggesting investors were questioning the credibility of fiat currencies and long term economic stewardship.
Oil prices advanced on fears that any conflict involving Iran could disrupt supplies from the energy rich Middle East. US crude climbed to its highest level since September, while Brent reached levels last seen in August.
Stock markets moved lower across the region, with losses recorded in Tokyo, Hong Kong, Shanghai, Sydney, and Seoul. Indonesian equities suffered a particularly sharp selloff, plunging more than eight percent after MSCI flagged governance and ownership concerns and paused plans to increase the country’s weighting in its indexes.
The Federal Reserve’s latest policy meeting provided little immediate direction, with Chair Jerome Powell offering no major surprises and saying officials remained focused on incoming data. However, investors are increasingly looking ahead to Trump’s expected nomination of the next Fed chair, with many anticipating a more dovish successor who could face sustained political pressure to cut interest rates later this year.