Gold prices moved higher in Asian trading on Thursday, building on a more than 2% surge in the prior session, as investors weighed ongoing geopolitical risks alongside mixed messaging from the Federal Reserve.
Spot gold rose 0.9% to $5,019.95 per ounce by 02:03 ET (07:03 GMT), while U.S. gold futures advanced 0.6% to $5,037.75.
The precious metal had rallied 2.1% on Wednesday, recouping much of the decline recorded earlier in the week.
Trading activity was relatively light, with several key Asian markets closed for public holidays, contributing to amplified short-term price fluctuations.
Geopolitical strains underpin safe-haven demand; Fed signals watched
Persistent geopolitical uncertainty continued to drive interest in bullion. Investors kept a close eye on escalating tensions between the United States and Iran, including concerns over shipping security in the Strait of Hormuz and the lack of progress in nuclear negotiations.
Limited headway in Russia-Ukraine peace talks further heightened global security concerns, reinforcing safe-haven inflows into gold.
However, sentiment turned more cautious after the release of minutes from the Federal Reserve’s latest policy meeting, which revealed differing views among officials on the future direction of interest rates.
Some policymakers pointed to the possibility of additional rate hikes if inflation remains stubborn, while others acknowledged that conditions may warrant easing later in the year.
The potential for U.S. rates to stay elevated for longer lent support to the dollar and Treasury yields, which in turn capped gains in non-yielding assets such as gold following its recent rally.
The U.S. Dollar Index was little changed after rising 0.6% overnight in response to the slightly hawkish tone of the Fed minutes.
Gold typically faces headwinds when interest rates increase, as higher yields raise the opportunity cost of holding the metal.
Market participants are now focused on Friday’s release of the U.S. personal consumption expenditures (PCE) price index — the Fed’s preferred inflation measure — for clearer guidance on monetary policy.
Broader metals complex advances; silver outperforms
Other precious and industrial metals also posted gains on Thursday.
Silver surged 2.3% to $78.98 per ounce, while platinum added 0.8% to $2,099.11 per ounce.
In base metals, benchmark copper futures on the London Metal Exchange slipped 0.5% to $12,920.20 per ton, whereas U.S. copper futures edged up 0.5% to $5.80 per pound.