Gold prices ticked higher Friday, adding to two days of gains as investors navigated heightened U.S.-Iran tensions and awaited key U.S. inflation data
At 06:00 ET (11:00 GMT), Spot gold gained 0.8% to $5,034.77 per ounce and U.S. Gold Futures rising 1.1% to $5,053.54/oz.
The yellow metal has risen sharply since mid-week, overturning earlier losses, as geopolitical anxieties resurfaced later.
Volumes were light, however, as Chinese markets were shut for the Lunar New Year holidays.
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U.S.-Iran tensions support bullion, PCE inflation awaited
Escalating diplomatic strains between Washington and Tehran have supported bullion in the later stages of this week.
U.S. President Donald Trump warned on Thursday that Iran must negotiate a nuclear deal or face unspecified consequences within about 10 to 15 days, underscoring the risk of military action that could disrupt Middle East oil flows and global markets.
"Markets remain sensitive to US-Iran talks, with lingering uncertainty helping to keep gold well-supported near record levels," said analysts at ING, in a note.
"The underlying outlook for gold remains constructive. Geopolitical risks, expectations of lower interest rates later this year, and continued investor and central‑bank demand are underpinning prices. While volatility is likely to stay elevated around geopolitical headlines, risks remain skewed to the upside, even if gains from here are likely to be more measured than the sharp rally seen previously."
That said, despite the geopolitical pressure, gold was held in check by a firmer U.S. dollar and hawkish signals from Federal Reserve minutes that tempered expectations for imminent rate cuts.
The US Dollar Index was poised to jump over 1% this week -- its best weekly performance in months, a dynamic that typically weighs on non-yielding assets like gold.
Market focus has shifted to Friday’s release of the U.S. Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge.
