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Gold prices (XAU/USD) edged higher during the Asian session on Thursday, reversing much of the prior day's decline from a nearly four-week peak. The rally was fueled by renewed speculation about a potential U.S.-Iran nuclear deal and increased bets on an earlier-than-expected Federal Reserve rate cut. Investors are positioning for geopolitical risks to drive safe-haven demand while also factoring in shifting monetary policy expectations.
The move highlights the dual drivers of gold's performance: geopolitical tensions and central bank policy. Traders are closely monitoring how developments in Iran negotiations and Fed rate decisions could impact the precious metal's trajectory. A Fed rate cut would weaken the U.S. dollar, indirectly boosting gold prices, while heightened geopolitical risks could spur further inflows into the asset.
For markets, the focus will remain on the Fed's upcoming policy statements and Iran-related news. If the U.S. and Iran reach a nuclear deal, gold could face downward pressure as safe-haven demand wanes. Conversely, prolonged tensions or delayed rate cuts might push gold toward $2,350 per ounce. Traders should also watch for technical resistance levels around $2,300 to assess the sustainability of the current rally.
