Gold prices edged higher in Asian trade on Thursday, hovering just below the US$5,200 an ounce mark as investors positioned cautiously ahead of renewed nuclear talks between the United States and Iran in Geneva.
By 4:15 pm AEDT (5:15 am GMT), spot gold was up 0.7% at US$5,198.80 per ounce, extending the previous session’s recovery as persistent U.S. dollar weakness and geopolitical uncertainty underpinned demand for the safe-haven asset.
The U.S. dollar continued to retreat against its major peers, pressured by improved risk appetite after upbeat earnings from chipmaker Nvidia Corp bolstered broader market optimism and reduced demand for defensive assets.
Lingering uncertainty over US trade policy settings also weighed on the Greenback, alongside a fresh bout of selling in the USD/JPY currency pair.
On Wednesday, U.S. Trade Representative Jamieson Greer said tariff rates for some countries could rise to 15% or higher from the newly imposed 10%, though he offered no further details.
Currency moves were further influenced by developments in Japan, where the yen strengthened after Kazuo Ueda, Governor of the Bank of Japan, said that policymakers will scrutinise data at the March and April meetings in deciding whether to raise interest rates
Geopolitical tensions also remained firmly in focus. U.S. and Iranian officials are set to meet later on Thursday in Geneva for a third round of discussions over Tehran’s nuclear programme.
Ahead of the talks, U.S. Secretary of State Marco Rubio said Iran’s refusal to discuss its ballistic missile programme posed a significant obstacle to progress.
Markets are wary that another inconclusive outcome — particularly one that signals only limited progress — could heighten the risk of military escalation.
A breakdown in negotiations may revive concerns about a potential U.S. strike on Iran, a scenario that would likely intensify safe-haven flows into gold.
At the same time, expectations that the Federal Reserve will resume cutting interest rates later this year continue to provide a supportive backdrop for bullion. Despite recent hawkish rhetoric from some policymakers, traders have maintained dovish bets on the policy outlook, viewing softer economic indicators and contained inflation pressures as justification for easing.
Looking ahead, investors will monitor weekly jobless claims data, and scheduled speeches from Fed officials could also inject short-term volatility into currency and commodity markets.
