Gold prices gained on Thursday, as rising tensions in the Middle East buoyed demand for the safe-haven asset, although the US Federal Reserve’s cautious stance on future rate cuts kept gains in check.
Spot gold was up 0.2 percent at $3,376.48 an ounce. US gold futures eased 0.4 percent to $3,393.70.
“Gold has made a modest bounce as we await the next steps in the Israel-Iran conflict. If the US does decide to get directly involved in the conflict this could raise the geopolitical stakes,” KCM Trade Chief Market Analyst Tim Waterer said.
Geopolitical tensions remained heightened as US President Donald Trump on Wednesday refrained from confirming whether the US would join Israel’s bombardment of Iranian nuclear and missile sites, prompting residents of Tehran to leave the city amid ongoing air strikes.
The US military has moved some aircraft and ships from bases in the Middle East that may be vulnerable to any potential Iranian attack, two US officials told Reuters on Wednesday.
Gold is often used as a safe store of value during times of geopolitical and financial uncertainty.
The Fed held interest rates steady on Wednesday. Fed policymakers still forecast slashing rates by half-a-percentage point this year, but they slowed the pace of future cuts.
However, Fed Chair Jerome Powell cautioned against putting too much weight on this outlook, warning of “meaningful” inflation ahead as higher import tariffs loom.
