Gold Climbs on US–Iran Tensions as Investors Assess Fed Policy Outlook

Gold prices extended their rally on Thursday, building on a more than 2% surge in the previous session, as escalating tensions between the United States and Iran boosted safe-haven demand. Spot gold rose 0.2% to $4,989.09 per ounce, while U.S. gold futures for April delivery held steady at $5,008.60. Market sentiment was influenced by geopolitical uncertainty after the White House indicated that differences remain in ongoing talks with Iran, even as some progress was reported in Geneva. U.S. national security officials also met to discuss regional military preparedness, adding to investor caution.

At the same time, traders are closely tracking the Federal Reserve’s policy trajectory. Minutes from the Fed’s January meeting showed policymakers largely agreed on keeping interest rates steady, though views diverged on the next move. Some officials signalled openness to further rate hikes if inflation remains sticky, while others indicated potential support for rate cuts should price pressures ease. Upcoming U.S. weekly jobless claims data and Friday’s Personal Consumption Expenditures (PCE) report — the Fed’s preferred inflation gauge — are expected to offer further clarity.

Markets are currently pricing in the first rate cut of the year around June, according to CME’s FedWatch Tool. Lower interest rate expectations typically support non-yielding assets such as gold. In other precious metals, spot silver gained 0.9% to $77.87 per ounce after a sharp rally, supported by tight supply and low COMEX inventories. Meanwhile, platinum slipped 0.6% to $2,059.55, and palladium declined 1.7% to $1,686.47.

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