Gold prices jumped over 2% in Asian trading on Monday as investors rushed into safe-haven assets after the U.S. and Israel launched major strikes on Iran that killed the country’s Supreme Leader Ayatollah Ali Khamenei.

Spot gold rose 2% to $5,380.55 an ounce by 01:33 ET (06:33 GMT), after reaching as high as $5,393.34/oz earlier in the session -- highest since late January.

U.S. Gold Futures climbed 2.8% to $5,391.46.

Middle East conflict boosts gold’s haven demand

Markets reacted to the unprecedented escalation in the Middle East after the weekend. The killing of Iran’s most powerful figure raised fears of a broader regional conflict and potential disruption to oil shipments through the Strait of Hormuz, a critical global energy artery.

Israeli forces launched a new wave of strikes on Tehran on Sunday, with missiles and aircraft targeting command infrastructure and air defences. Tehran responded with further missile barrages at Israeli territory and U.S. bases in the Gulf.

The geopolitical shock triggered a classic risk-off move across markets, with equities sliding and crude oil surging, reinforcing demand for bullion as a store of value.

"A regional spillover or disruption to energy supplies would materially boost gold through higher oil prices, increased inflation expectations and contained real yields," ING analysts said in a note.

Analyst flags $5,400/oz as key levels to watch

Senior Research Strategist at Pepperstone, Michael Brown, flagged $5,400/oz, followed by the late-Jan record high at $5,595/oz, as the key levels to watch to the upside.

"This weekend’s developments do reinforce the strong fundamental bull case for gold, which will remain the beneficiary of haven inflows in an increasingly uncertain world, with hefty retail and reserve demand both providing tailwinds too," he said.

Brown also sees a potential move towards the $6,000/oz mark by the end of the year.

Gold has risen nearly 25% this year, buoyed by geopolitical risks, central bank purchases, and Federal Reserve easing bets.

Among other precious metals, Silver prices rose 1.3% to $95.15 per ounce, while platinum gained nearly 1% to $2,389.11/oz.

Benchmark Copper Futures on the London Metal Exchange edged up 0.3% to $13,411 a ton, while U.S.Copper Futures gained 0.2% to $6.07 a pound.