Gold prices have been trading steady since the week opened at $4,540 as investors continue to assess further developments in the stalled US-Iran peace talks and the continued threat to the Strait of Hormuz.
At 9 am, gold prices were trading at $4,544, flat since they opened early Thursday in the Asian session.
Gold prices moved cautiously after US President Donald Trump claimed that talks between the US and Iran are now in the final stages.
The statement increased market hopes that geopolitical tensions in the Middle East may be eased in the near future.
However, market sentiment remained mixed as Trump also warned that the US is ready to launch another attack in the coming days if Iran fails to meet the conditions set by Washington.
The situation has caused investors to continue to monitor geopolitical developments that could have a major impact on the movement of safe-haven assets such as gold and crude oil.
At the same time, market analysts see any resolution of the conflict or the reopening of the Strait of Hormuz as a potential positive catalyst for the gold market.
This is because the decline in geopolitical risks is expected to support expectations of future global interest rate cuts, thus helping demand for the precious metal.
Meanwhile, the minutes of the Federal Open Market Committee (FOMC) meeting for April showed that the majority of Federal Reserve (Fed) officials are still concerned about persistent inflationary pressures.
Fed officials warned that the US central bank may need to consider raising interest rates if inflation continues to remain high above its 2% target.
At its April meeting, the Fed maintained its benchmark interest rate in a range of 3.50% to 3.75%. The cautious approach shows that the US central bank is still assessing the impact of geopolitical uncertainties and global price pressures before making its next monetary policy decision.
