Gold prices traded higher during Wednesday’s Asian session, drawing dip-buyers after a modest pullback from recent highs and moving back towards the US$5,200 per ounce level.
By 3:30 pm AEDT (4:30 am GMT), spot gold was up 0.8% to US$5,182.66 per ounce.
Heightened tensions ahead of a third round of U.S.-Iran nuclear talks, scheduled for Thursday, have underpinned demand for the safe-haven metal.
The talks come amid a continued build-up of American forces in the Middle East.
Additional support for bullion has come from renewed selling pressure on the U.S. dollar. Despite a relatively hawkish tone from the Federal Reserve and upbeat economic data released on Tuesday, the greenback has struggled to gain sustained traction.
Investor sentiment remains fragile amid ongoing turbulence surrounding trade policy under President Donald Trump. Earlier this week, the United States implemented a 10% tariff on all non-exempt goods following a Supreme Court ruling that curtailed aspects of Trump’s broader tariff regime.
The president has since pledged to lift duties to 15%, fuelling fears of retaliatory action and renewed strain on global supply chains.
Those concerns have tempered demand for the dollar, providing a tailwind for dollar-denominated commodities such as gold.
Meanwhile, a series of comments from senior Federal Reserve officials reinforced expectations that interest rates will remain elevated in the near term as inflation proves sticky.
Boston Fed President Susan Collins said it would be appropriate to keep rates within the current range for some time.
On the data front, the Conference Board reported that its consumer confidence index rose to 91.2 in February, up from a revised 89.0 in January.
Although geopolitical risks and U.S. dollar weakness are lending support to gold, the broadly constructive tone across equity markets may limit the scope for aggressive upside moves.
