Gold prices (XAU/USD) rose again on Thursday, driven by geopolitical developments and a weaker US dollar. Israeli Prime Minister Benjamin Netanyahu expressed his openness to holding talks with Lebanon, thus easing some tensions in the region.
At 9.20 am, gold prices were at $4,761, down 0.08% since they opened early Friday in Asian trading.
Netanyahu said the talks were expected to focus on efforts to disarm Hezbollah and pave the way for peaceful relations between Israel and Lebanon.
In a related development, Agence France-Presse reported that Lebanon is now trying to reach a ceasefire first before talks begin.
At the same time, the critical Strait of Hormuz route remains partially closed despite a two-week ceasefire between the US and Iran that has begun. So far, only five ships have been reported to have passed through the strait compared to around 140 ships a day before the conflict.
Meanwhile, Pakistan is preparing to host preliminary talks between the US and Iran in Islamabad, signaling growing diplomatic efforts to ease tensions.
The developments put pressure on oil prices, with WTI trading around $95.60, down 0.13%. Meanwhile, the US dollar continued to weaken by 0.30%, while the US Dollar Index (DXY) fell to 98.63.
The rise in gold prices was supported by a decline in US government bond yields, with the 10-year Treasury yield falling two basis points to 4.279%, increasing the appeal of gold as a safe-haven asset.
On the economic front, data showed US growth remained subdued. Gross Domestic Product (GDP) grew by just 0.5% YoY in the last quarter of 2025, according to the Bureau of Economic Analysis.
Meanwhile, core inflation measured by the PCE Index fell to 3% from 3.1%, in line with expectations.
The labor market showed mixed resilience. Initial Jobless Claims rose to 219,000, exceeding expectations, but Continuing Claims fell to 1.794 million, the lowest level since May 2024.
Market expectations for Federal Reserve monetary policy remained steady, with traders expecting an easing of around 7.5 basis points by year-end, according to Prime Market Terminal (PMT) data.
