Gold traded near $4,985 in early Asian trade on Thursday. It stayed in positive territory as investors returned to safe-haven assets. Markets are now focused on US Initial Jobless Claims, Pending Home Sales, and comments from Federal Reserve officials later today.
US Vice President JD Vance said Iran has not accepted key US demands in talks. CNBC reported that Washington agreed to give Tehran two weeks to close the gaps. US President Donald Trump said force is still an option if diplomacy fails to stop Iran’s nuclear program.
Holiday Liquidity And Gold Trading
Liquidity was thin due to holidays in major regions. BMO Capital Markets said gold often softens during holiday periods, which can create chances for bargain buying.
A stronger US Dollar could limit gains in dollar-priced gold. Minutes from the Fed’s January meeting showed several policymakers said rates may need to rise if inflation stays high. That pushed traders to scale back expectations for a rate cut this year, though futures still price in a possible cut by June.
Central banks added 1,136 tonnes of gold, worth about $70 billion, to reserves in 2022. That was the largest annual purchase on record, according to the World Gold Council. Gold often moves in the opposite direction of the US Dollar and US Treasury yields, and it tends to perform better when interest rates fall.
Gold is holding near the $5,000 level, mainly because tensions with Iran are rising. Safe-haven demand is the key driver right now and is helping to support prices. Any escalation from the White House over the next two weeks could push gold higher.
Key Forces Driving The Next Move
This strength did not appear overnight. It rests on years of central bank buying, which accelerated in 2022 and 2023. From what we can see in 2026, official data later confirmed that emerging-market buying stayed at record levels through 2024 and 2025. That steady demand is a major reason gold has more than doubled since those years.
Still, the US Dollar and the Federal Reserve remain critical. The January FOMC minutes leaned hawkish. Several members were open to raising rates again if the inflation seen through 2025 proves persistent. If the Fed keeps rates high for longer—or hikes again—it would likely limit further gains in gold.
Right now, the market is split. Fed funds futures still point to a possible cut by June, while the Fed’s messaging remains tough. This gap between market pricing and Fed signals raises the risk of volatility. Traders will watch jobless claims and housing data closely for clues that could shift expectations.
This setup can suit options strategies that limit risk. With gold at a high level, outright long positions are expensive and vulnerable to a quick reversal if geopolitical tension eases. It may be better to use strategies that can benefit from a sharp move in either direction.
If you expect tensions to lift gold, bull call spreads offer defined-risk exposure to further upside. If you think the Fed’s hawkish stance will win out and support the dollar, put spreads can be a cheaper hedge. The goal is to be positioned for a clear break from the current stalemate.
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