As geopolitical tensions in the Middle East continue to escalate, the price of gold reclaimed lost ground ahead of the weekend, climbing back above $5,200 per ounce, indicating a clear resurgence in safe-haven demand.

Analysts suggest that against the backdrop of potential military action against Iran, investors are seeking to increase their holdings of "insurance" assets within their portfolios.

Phillip Streible, Chief Market Strategist at Blue Line Futures, commented, "Looking at the current performance of equities versus gold, it's easy to see which asset class is preferred right now."

Streible noted that the S&P 500 index closed the week lower, failing to decisively break through the key 7,000-point resistance level. It ended the week at 6,878.88 points, down 0.44%.

Meanwhile, spot gold closed at $5,279.23 per ounce, representing a gain of $172.06, or 3.37%, from the previous Friday's close.

Silver demonstrated even stronger momentum. Spot silver closed at $93.737 per ounce, recording a weekly surge of 10.82%.

Streible added that the robust rebound in gold prices this month signals a shift in investor sentiment towards the metal.

"When equities decline, the clear benefits and asset allocation advantages of holding gold become apparent. Recent price action in financial markets has further solidified gold's role within a portfolio," he stated.

Although both gold and silver remain below their January peaks, they have rebounded significantly from their lows. Gold has climbed 19% from its low near $4,400 per ounce, while silver has rallied over 45% from its low.

Aaron Hill, Chief Market Analyst at FP Markets, expressed optimism for gold but indicated he does not foresee prices breaking to new record highs in the immediate short term.

"Gold's strong monthly rebound following January's volatility suggests the broader uptrend remains structurally intact. Safe-haven demand and softening rate expectations are providing support. However, in the short term, this appears more like a controlled consolidation rather than an uncontrolled surge," Hill said. "I am monitoring resistance near recent highs and key support levels formed during pullbacks. A decisive break above resistance would confirm trend continuation, while a break below support would suggest a need for a deeper consolidation."

While gold remains attractive as a hedge against geopolitical uncertainty, its trajectory is also highly sensitive to U.S. monetary policy.

Data released Friday by the U.S. Labor Department showed that wholesale inflation (PPI) rose 2.9% over the past 12 months, exceeding market expectations of 2.6%. Analysts noted that if inflation persists at elevated levels, the Federal Reserve may maintain higher interest rates for longer, which could pose a headwind for gold.

Hill suggested that in this environment, gold prices might continue to trade sideways.

"Until the Fed provides clearer guidance, markets may remain range-bound. PPI will be a short-term catalyst: if inflation cools, falling real yields would benefit gold; if data comes in hot, it could trigger a temporary pullback, but it's unlikely to reverse the long-term bullish trend unless it significantly alters rate expectations," he explained.

Michele Schneider, Chief Market Strategist at MarketGauge, believes that while gold and silver still have some room to advance, the current risk-reward ratio is not ideal. She anticipates gold will face strong resistance near $5,400, and silver may struggle to break above the $100 level.

She also pointed out that with gold at elevated levels, some investors might rotate into other safe-haven assets, particularly the bond market.

Even amidst persistent inflation concerns, U.S. Treasury yields retreated noticeably ahead of the weekend. The yield on the 10-year Treasury note fell to 3.95%, its lowest level since last October.

"Rising bond prices may reflect investor concerns about a potential recession, and I'm not entirely convinced gold would perform as strongly in a recessionary environment. Bonds could become a new competitor for gold, potentially capping its gains," Schneider said.

Despite these cautious voices, analysts generally agree that gold retains solid support given the high degree of uncertainty in the global economy and financial markets.

Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, maintained a bullish stance on gold but expects significantly increased market volatility next week due to a heavy slate of economic data releases.

"A significant amount of economic data is due next week, particularly U.S. employment figures. Frankly, we do not expect the jobs data to be particularly strong, which suggests gold buying interest could persist. The bullish narrative remains dominant for now," Aslam stated.

Schneider also noted that disappointing economic data would provide short-term support for gold. Even if inflation remains elevated, the Fed might still take measures to support the economy and the labor market.

Key economic releases for the upcoming week include the ISM Manufacturing PMI on Monday, the ADP Employment report and ISM Services PMI on Wednesday, U.S. Initial Jobless Claims on Thursday, and the U.S. Non-Farm Payrolls report and Retail Sales data on Friday.