Gold prices saw a modest uptick on Thursday, supported by a combination of a weaker dollar and escalating tensions in the Middle East. By 06:52 GMT, spot gold edged 0.15 percent higher to $2,029.10 per ounce, while U.S. gold futures also rose by 0.25 percent to $2,039.10 per ounce. This follows Wednesday’s peak, marking the highest level since February 9th.
Short-term outlook
The dollar index extended its losses for the fourth consecutive day, rendering gold more attractive to overseas buyers. By 05:10 GMT, the dollar index fell to 103.905. The decline in the dollar gold prices has contributed to its appeal as an alternative investment.
Analysts provided insights into the short-term outlook for gold prices, characterizing it as mixed. Hence, delays in the timeline for potential rate cuts by the Federal Reserve are somewhat balanced by safe-haven demand stemming from escalating geopolitical tensions.
Tensions in the Middle East intensified, further supporting gold prices. The ongoing conflict has raised concerns and contributed to the safe-haven appeal of gold.
U.S. economic data
Investor attention is centered on forthcoming U.S. economic data and its effect on gold prices. The data could offer insights into the Federal Reserve’s interest rate outlook. U.S. manufacturing and flash services data are scheduled for 14:45 GMT. Meanwhile, initial jobless claims data is due at 13:30 GMT.
Besides, Wednesday’s minutes from the Federal Reserve’s latest policy meeting revealed that many policymakers expressed concerns about the risks associated with premature interest rate cuts. January’s inflation data, indicating faster-than-anticipated rises in consumer and wholesale prices, further complicate future monetary policy decisions.
The market currently reflects a 72 percent probability of a rate cut in June, according to the CME Fed Watch Tool. Lower interest rates typically enhance the appeal of holding non-yielding assets like gold.
Read: Gold prices hit one-week high ahead of Fed meeting
Other precious metals
In addition to gold prices, other precious metal prices also experienced gains. Spot platinum rose by 0.3 percent to $885.30 per ounce while palladium increased by 0.6 percent to $955.63. Meanwhile, silver gained 0.1 percent to $22.89 per ounce.
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