Gold prices rose on Thursday amid a weaker dollar and reports of strong central bank buying. Rising geopolitical tensions in the Middle East also contributed to increased demand for the precious metal.
The XAU/USD was up 0.89% at $2,382.48 over the past 24 hours, with US June gold futures up 0.38% at $2,397.45.
The US Dollar Index (DXY) fell 0.21% to 105.9, led by low US Treasury yields.
The yield on the 10-year US Treasury note fell 0.20% to 4.575.
Geopolitical tensions remain, and there are fears that the conflict could escalate and spread beyond the Gaza Strip if Israel responds harshly to Iran, FX Street reported.
Israeli Prime Minister Benjamin Netanyahu said that Israel will make its own decisions on how to defend itself, as Western countries have called for restraint in response to a series of attacks from Iran.
Meanwhile, Jordanian Foreign Minister Ayman Safadi stressed that an Israeli response to the Iranian attacks could pose a significant risk of dragging the entire region into a devastating war.
At the same time, Loretta Mester, head of the Federal Reserve Bank of Cleveland, acknowledged that inflation has exceeded expectations and that the US central bank will need additional assurances before confirming the sustainability of inflation at 2%.
This statement, coupled with the speech by the Federal Reserve Chairman, has led to markets now pricing in a 44 basis point rate cut by the Fed, well below the 160 basis point cut expected at the beginning of the year.
Traders' and investors' attention is now focused on the weekly US jobless claims and existing home sales reports, which will be released later in the day.
Related: Dollar declines as traders assess prospects for Fed rate cut