Gold prices were little changed during Thursday’s Asian session, pausing after sharp volatility in the previous session as investors weighed geopolitical risks against monetary policy signals.
Spot gold was trading near flat at $4,721.16 per ounce as of 3:40 pm AEST (5:40 am GMT), hovering around the $4,700 level amid uncertainty over a fragile ceasefire in the Middle East.
Ongoing doubts over the agreement between Washington and Tehran have supported the dollar, even as minutes from the Federal Reserve signalled a more dovish policy outlook.
Gold’s direction remains finely balanced as investors assess conflicting forces. On one hand, geopolitical tensions, particularly continued Israeli strikes on Hezbollah targets in Lebanon, have raised concerns that the ceasefire may not hold.
On the other hand, expectations of potential U.S. rate cuts have offered some support for the precious metal.
“Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,” the Fed said in its latest meeting minutes.
Iranian Foreign Minister Abbas Araghchi indicated that the ceasefire announcement included Lebanon, while U.S. Vice President JD Vance rejected that claim, reinforcing statements from President Donald Trump and Israeli Prime Minister Benjamin Netanyahu that the truce did not extend to the country.
Tensions escalated further after Iran halted the passage of oil tankers through the Strait of Hormuz in response to continued Israeli strikes on Beirut, reversing an earlier reopening tied to the ceasefire.
Reuters reported that Hezbollah launched rockets toward northern Israel in retaliation for what it described as “ceasefire violations”.
The renewed uncertainty surrounding the Strait of Hormuz and broader regional stability has revived safe-haven demand, helping to cushion recent losses in oil prices while maintaining a cautious tone in gold markets.
Attention is now shifting to upcoming U.S. economic data, including the final estimate of fourth-quarter gross domestic product, weekly jobless claims, and the core personal consumption expenditures (PCE) price index - the Fed’s preferred inflation gauge.
However, markets may place limited weight on the PCE reading, as it reflects February data and may not yet capture the economic impact of the Middle East conflict.
Looking ahead, investors are likely to focus more closely on the March consumer price index (CPI) release on Friday (Saturday AEST), which is expected to provide a clearer signal on inflation trends and the potential trajectory of U.S. monetary policy.
