Gold prices moved higher in Thursday’s Asian trading session as investors sought safe-haven assets amid escalating geopolitical tensions and rising potential of more accommodative United States monetary policy.
By 3:15 pm AEDT (4:15 am GMT), spot gold was trading 0.9% higher at US$5,184.67 per ounce, approaching the key US$5,200 level.
The rally came as the conflict involving the United States, Israel and Iran intensified. The war escalated sharply on Wednesday after a U.S. submarine sank an Iranian warship off the coast of Sri Lanka while air defences from the North Atlantic Treaty Organization intercepted an Iranian ballistic missile fired towards Turkey.
Geopolitical uncertainty increased further as reports indicated that the powerful son of Iran’s slain supreme leader had emerged as a leading candidate to succeed him.
On the monetary policy front, Donald Trump on Wednesday officially nominated former Federal Reserve governor Kevin Warsh to serve as the next chair of the central bank.
Warsh is widely viewed as supportive of more accommodative policy settings, raising expectations that interest rates could be lowered later this year.
Economic data released in the United States also drew investor attention. Figures from ADP showed that private-sector employers added 63,000 jobs in February, exceeding market expectations for an increase of 50,000.
Meanwhile, the Institute for Supply Management reported that activity in the U.S. services sector strengthened sharply in February. The headline index rose to 56.1 from 53.8 in January, comfortably surpassing expectations of 53.5.
Market participants are now awaiting the latest U.S. weekly jobless claims figures for further clues on labour market conditions.
Beyond geopolitical developments, concerns about the outlook for the global economy, particularly in China, have also supported demand for gold. Beijing earlier set its economic growth target for 2026 at between 4.5% and 5%, slightly below the roughly 5% pace achieved last year.
