Gold Prices Rise Above $5,000 as Geopolitical Risks Support Safe-Haven Demand
Gold prices climbed in Asian trading on Thursday, building on gains of more than 2% in the previous session. Investors continued to weigh ongoing geopolitical tensions and mixed signals from the Federal Reserve on the outlook for interest rates.
Spot gold advanced 0.9% to $5,019.95 per ounce by 02:03 ET (07:03 GMT), while U.S. gold futures rose 0.6% to $5,037.75. The precious metal had surged 2.1% on Wednesday, recovering most of the losses recorded earlier in the week.
Trading volumes remained relatively light due to holiday closures in several major Asian markets, which amplified short-term price movements.
US-Iran Tensions Boost Gold Demand
Persistent geopolitical risks remain a key driver of gold prices. Investors are closely monitoring rising tensions between the United States and Iran, particularly concerns over maritime security in the Strait of Hormuz and stalled nuclear negotiations.
In addition, limited progress in Russia-Ukraine peace talks has sustained broader security concerns, reinforcing safe-haven flows into bullion.
Fed Minutes Cap Further Upside
Despite strong demand for gold, gains were tempered after the Federal Reserve released minutes from its latest policy meeting. The report revealed divisions among policymakers regarding the future direction of interest rates.
Some officials suggested further rate hikes may be necessary if inflation remains elevated, while others acknowledged the possibility of policy easing later this year.
The prospect of higher-for-longer U.S. interest rates supported the dollar and Treasury yields, limiting gold’s upside momentum. The U.S. Dollar Index traded largely flat after climbing 0.6% in the previous session following the Fed minutes.
Gold typically faces headwinds when borrowing costs rise, as higher yields increase the opportunity cost of holding non-yielding assets such as bullion.
Markets are now focused on the upcoming U.S. Personal Consumption Expenditures (PCE) price index data, due Friday. As the Fed’s preferred inflation measure, the report is expected to provide clearer guidance on the central bank’s policy path.
Silver and Platinum Extend Gains; Copper Mixed
Other precious metals also moved higher. Silver jumped 2.3% to $78.98 per ounce, while platinum gained 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. However, U.S. copper futures edged up 0.5% to $5.80 per pound.
Overall, metal markets remained supported by geopolitical uncertainty, even as monetary policy concerns limited further upside.
