Gold Rallies, USD Gains as Israel-Iran Conflict Drives Haven Flows

Safe-haven assets surged Friday as Israeli military strikes on Iranian nuclear facilities sparked intense risk aversion across global markets. Gold prices jumped alongside US dollar strength in an unusual dual rally, reflecting extreme uncertainty as geopolitical tensions escalated dramatically. The dollar index climbed 0.8% while gold advanced toward $2,400/oz, with both benefiting from flight-to-quality flows. Oil prices spiked above $85/barrel on supply disruption fears, adding inflationary pressure to already volatile markets. Currency markets showed classic risk-off patterns with USD/JPY falling 120 pips to 155.30 and EUR/USD dropping to 1.0750 from 1.0820 highs. Federal Reserve rate cut expectations diminished as traders priced in prolonged uncertainty and potential inflation from higher energy costs. Technical analysis shows gold breaking above key resistance at $2,380, targeting $2,450 if geopolitical tensions persist through the weekend.