Gold prices edged up on Thursday after rising more than 2% a day earlier, as persisting geopolitical tensions between the U.S. and Iran lifted safe-haven demand, while investors assess the Federal Reserve's monetary policy path.
Spot gold rose 0.5% to $5,004.47 per ounce by 0634 GMT. U.S. gold futures for April delivery were up 0.3% at $5,025.10.
"If there's anything fundamental you could point to that would be supporting (gold) prices, it's the prospect of conflict in the Middle East and the kind of safe-haven demand that goes along with it," said Kyle Rodda, senior market analyst at Capital.com.
Some progress was made during Iran talks this week in Geneva but distance remained on some issues, the White House said on Wednesday, while Russian Foreign Minister Sergei Lavrov warned that any new U.S. strike on Iran would have serious consequences.
Meanwhile, January Fed minutes showed that policymakers were in near-unanimous agreement to keep interest rates on hold, but remained split over their next steps, with "several" open to rate hikes if inflation remains elevated, while others were inclined to support further cuts if inflation recedes.
Non-yielding bullion tends to do well in low-interest-rate environments.
Markets currently expect this year's first interest rate cut to be in June, according to CME's FedWatch Tool.
Investor attention now turns to weekly jobless claims due later in the day and Friday’s Personal Consumption Expenditures report which is the Fed’s preferred inflation metric. Mainland Chinese, Hong Kong, Singapore, Taiwan and South Korea markets were closed for the Lunar New Year holidays.
"We still see a period of consolidation in the near term before prices of gold and silver trend higher gradually. For silver, consolidation is likely to hold in the $70 to $90 range while gold may trade in the $4,800 to $5,100 range in the interim," said Christopher Wong, a strategist at OCBC.
Spot silver rose 1.5% to $78.36 per ounce after rising more than 5% on Wednesday.
Spot platinum edged 0.7% higher to $2,084.71 per ounce, while palladium gained 0.4% to $1,722.94.
Oman Observer is now on the WhatsApp channel. Click here
