Gold prices surged 2.2% to $5,395.25 an ounce following U.S. and Israeli strikes on Iran, driven by investor flight to safe-haven assets amid fears of a broader regional conflict. Analysts at Pepperstone, including Michael Brown, caution that the initial spike could wane as markets assess the financial fallout from the widening conflict. The killing of Iran's Supreme Leader Ayatollah Ali Khamenei heightened concerns about potential oil shipment disruptions through the critical Strait of Hormuz.

Brown emphasized that markets notoriously misprice geopolitical risk, often swinging to extremes before rational assessment prevails. While the attacks reinforced gold's "fundamental bull case" by boosting haven inflows, Brown noted hefty retail and reserve demand would provide tailwinds. He suggested a further climb towards $6,000 an ounce by year-end was possible but flagged it wouldn't be a straight path.

Away from geopolitics, investors await key economic data and earnings reports, including the February U.S. jobs report and results from Broadcom and Target in early March.