Gold rises above $4,950 as US-Iran tensions boost safe-haven demand

• Gold price rises to around $4,985 in Thursday’s early Asian session. 

• US Vice President said Iran ignored key US demands, adding that military strikes are on the table. 

• FOMC Minutes showed a surprise shift in tone as several members suggested raising the rates. 

Gold price (XAU/USD) holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand. Traders will keep an eye on the release of US Initial Jobless Claims,  Pending Home Sales data, and the Fedspeak later on Thursday. 

US Vice President JD Vance said on Wednesday that Iran had failed to acknowledge key US demands in talks, after which Washington said it had agreed to give Tehran two weeks to close the gaps between the sides, per CNBC. Meanwhile, US President Donald Trump reserves the right to use force if diplomacy does not succeed in stopping Iran’s nuclear program. Signs of rising tensions between the US and Iran could boost a traditional safe-haven asset such as Gold. 

Market liquidity remained low due to holidays in major regions. Analysts at BMO Capital Markets noted that throughout the holiday period, investors can reasonably expect a soft patch for yellow metal, opening a window for bargain buying. 

Renewed US Dollar (USD) demand might cap the upside for the USD-denominated commodity price. The Federal Open Market Committee (FOMC) Minutes from its January policy meeting showed a shifting tone within the committee. Several policymakers said that the US central bank may need to raise rates if inflation remains stubbornly high. Traders dialed back their expectations for a Fed rate cut this year, though Fed funds futures contracts still suggest a reduction is likely by June.