Gold prices surged more than 2% in trading sessions as investors sought safe-haven assets amid a softer U.S. dollar and changing expectations for interest rate policy. The precious metal's rally came as markets weighed the potential economic impacts of ongoing geopolitical tensions in the Middle East.

The conflict involving Iran has contributed to rising energy costs, with gas prices jumping and creating broader inflationary pressures across global markets. These developments have complicated central bank policy decisions, as higher energy costs threaten to sustain elevated inflation rates.

U.K. inflation data released for February showed price growth remaining steady, though economists noted the figures were collected before the latest escalation in Middle East tensions. The pre-conflict data may not reflect the full impact of recent energy price increases on consumer costs.

Retail price data revealed significant increases in food costs over the past two years, with some grocery staples more than doubling in price. Items such as vegetarian alternatives and chocolate were among the categories showing the largest price increases, raising concerns about household spending power.

Bond markets experienced volatility as investors reassessed interest rate expectations. U.K. government bonds were particularly affected during the market sell-off, reflecting concerns about the country's inflation outlook and monetary policy trajectory.

Analysts warned that current inflation readings may not capture the full economic impact of recent geopolitical developments, suggesting more significant price pressures could emerge in coming months as energy costs work through the broader economy.