Gold wavers near $5,000 as traders assess geopolitics, Fed rate

Volatility in both gold and silver has been exceptionally high in recent months, particularly since a historic rout at the end of January

• Gold nears $5,000 due to geopolitical tensions and Fed uncertainty
• Renewed haven demand boosts gold; silver rises 2.3% to $79.02
• Fed's rate stance and US-Iran tensions drive market volatility

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Gold hovered around $5,000 an ounce as traders assessed the latest flareup in geopolitics and the Federal Reserve’s next move on interest rates.

President Donald Trump said the US has to “make a meaningful deal” with Iran, adding that the next 10 days will tell whether there will be an accord. Iran is a “hot spot” right now even as officials from both sides engage in “good talks,” Trump said. He also said his son-in-law Jared Kushner will be an “envoy of peace.”

The US military buildup in the region means Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog.

Renewed geopolitical risks boosted haven demand for bullion, which advanced as much as 0.9% before paring some of the gains.

Traders were also mulling the path of US interest rates, which will be a key driver for gold prices. Fed officials appeared surprisingly wary of cutting rates when they met last month, according to the minutes of the US central bank’s Jan. 27-28 policy meeting, released Wednesday.

That could put the central bank on a collision course with President Donald Trump, complicating the task of the president’s nominee for chair, Kevin Warsh. Trump has spoken in favor of lower borrowing costs, which would be a tailwind for non-yielding bullion.

Volatility in both gold and silver has been exceptionally high in recent months, particularly since a historic rout at the end of January.

Banks including BNP Paribas SA, Deutsche Bank AG and Goldman Sachs Group Inc. have forecast that gold will resume an upward trend, with many of the factors that underpinned a multiyear rally still intact. Concerns over the Fed’s independence and geopolitical tensions have supported bullion.

Spot gold climbed 0.8% to $5,017.98 an ounce as of 10:38 a.m. in New York. Silver rose 2.3% to $79.02. Platinum and palladium both edged lower.