Gold prices rose on Thursday as the Iran-Israel conflict dragged on for a seventh day, boosting demand for the safe-haven asset, although the US Federal Reserve's cautious stance on future interest rate cuts kept gains in check.

Spot gold was up 0.2% at $3,374.54 an ounce, by 0505 GMT. US gold futures were down 0.5% at $3,391.90.

"Gold has been gaining a bit as we wait for the next move in the Israel-Iran conflict. If the US decides to get directly involved in the conflict, that could raise the geopolitical stakes," said Tim Waterer, chief market analyst at KCM Trade.

Geopolitical tensions continued to rise as US President Donald Trump on Wednesday refrained from confirming whether the US would join Israel's bombardment of Iran's nuclear and missile sites, prompting Tehran residents to flee the city amid ongoing airstrikes.

The U.S. military has moved some aircraft and ships away from bases in the Middle East that could be vulnerable to potential Iranian attacks, two U.S. officials told Reuters on Wednesday.

Gold is often used as a safe store of value during times of geopolitical and financial uncertainty.

The Fed kept interest rates steady on Wednesday. Fed policymakers still expect a half-percentage-point rate cut this year, but they slowed the pace of future cuts.

However, Fed Chair Jerome Powell cautioned against putting too much weight on the outlook, warning of "meaningful" inflation ahead as higher import tariffs loom.

"The Fed was not as dovish as many had hoped, and I would argue Powell was a little more hawkish than many had hoped. The U.S. dollar is likely at oversold levels, and that is likely to cap gold's upside over the next few weeks," said Matt Simpson, senior analyst at City Index.

Elsewhere, spot silver was steady at $36.74 an ounce, platinum rose 1% to $1,336.08, while palladium rose 1.2% to $1,061.37. (alg)

Source: Reuters