Gold prices rose more than 2% as U.S.-Israel strikes on Iran expanded Monday with no end in sight, stoking fears of wider geopolitical and economic uncertainty and sparking a flight to safe havens.

Spot gold gained 2.1% to $5,388.59 an ounce as of 1255 GMT (7:55 a.m. EST), after hitting a more than four-week high earlier in the session.

The metal touched a peak of $5,594.82 on January 29. U.S. gold futures rose 3% to $5,404.20 per ounce.

"What we're seeing is an increase in safe-haven assets, which is reflected in the gains in gold and also reflected in the losses of risk-related assets, such as stocks," said ActivTrades analyst Ricardo Evangelista.

Global shares slid on the day, as the military conflict in the Middle East looked set to last for weeks, threatening to upend a global economic recovery and reignite inflation concerns.

Following the U.S.-Israel attack, Iran struck back at Gulf cities that host U.S. military bases, disrupting regional air travel and halting the passage of oil and product tankers through the key Strait of Hormuz.

Israel expanded its assault on Monday to include attacks on Iran-backed Hezbollah militants in Lebanon.

Bullion has strengthened this year due to heightened global political turmoil and economic uncertainties.

The latest rally extends gold's 64% rise last year, driven by strong central bank buying, robust inflows into exchange-traded funds and expectations of U.S. monetary policy easing.

"The situation remains highly uncertain and the escalation further fuels the bullish mood in the gold and silver markets, providing support to prices and stability to a portfolio at a time of heightened volatility in financial markets," said Julius Baer analyst Carsten Menke.

BNP Paribas last week raised its 2026 gold price forecast by 27% to $5,620 per ounce and said it expects prices to peak above $6,250 per ounce by year-end due to persistent macro and geopolitical uncertainty.

Investors will have their eyes on a slate of U.S. labor data due for release this week, including the ADP employment report, weekly jobless claims and the non-farm payrolls report.

Meanwhile, spot silver was up 1.4% at $95.10 per ounce, after touching its highest in a month earlier in the session.

Spot platinum fell 0.3% to $2,358.33 per ounce, while palladium advanced 0.6% to $1,797.47.