Gold drifts higher to $5,000 on heightened US-Iran tensions

• Gold price edges higher to around $5,000 in Friday’s early Asian session. 

• Heightened geopolitical worries over US-Iran tensions boost the safe-haven flows, supporting the Gold price. 

• The upbeat US economic data have led the Fed to hold interest rates in the near term.

Gold price (XAU/USD) holds positive ground near $5,000 during the early Asian session on Friday. The precious metal edges higher as escalating tensions between the United States (US) and Iran boost safe-haven demand. Traders brace for the preliminary reading of US Gross Domestic Product (GDP) for the fourth quarter (Q4), the Personal Consumption Expenditures (PCE) and the S&P Global Purchasing Managers Index (PMI) data, which are due later on Friday.

US President Donald Trump said on Thursday that Iran had 10 to 15 days at most to strike a deal over its nuclear program, per Bloomberg. Trump added that  "really bad things will happen" if no deal is reached with Iran and the US will get a deal one way or the other. Tracking site FlightRadar24’s data showed a surge of flight activity by US military transport, aerial tankers, surveillance aircraft and drones to bases in Qatar, Jordan, Crete and Spain.

Traders will closely monitor the developments surrounding a potential US-Iran conflict. Rising tensions between both countries could boost a traditional safe-haven asset such as Gold in the near term. 

The recent US economic data showed the US economy was on a stable footing, giving the Federal Reserve (Fed) leeway to hold interest rates in check in the near term. A higher-for-longer US interest rate stance generally has a negative impact on a non-yielding Gold as it doesn’t pay interest. 

Minneapolis Fed President Neel Kashkari said the labor market has remained "pretty resilient" and that the central bank is close to both mandates of maximum employment and stable prices. Meanwhile, San Francisco Fed President Mary Daly stated that the monetary policy is in a good place.