NEW YORK, Feb 19 (Reuters): Gold prices extended gains on Thursday after rising more than 2 per cent in the previous session, as lingering tensions between the United States and Iran prompted a flight to safety, while investors evaluated the Federal Reserve's monetary policy path.
Spot gold rose 0.2 per cent to $4,989.09 per ounce by 1227 GMT. US gold futures for April delivery held steady at $5,008.60.
"Geopolitical concerns are front and centre with reports that, if the US were to take military action against Iran, it could go on for several weeks," said Jamie Dutta, market analyst at Nemo.money.
Some progress was made during Iran talks this week in Geneva but distance remained on some issues, the White House said on Wednesday.
Top US national security advisers met in the White House Situation Room on Wednesday to discuss Iran and were told all US military forces deployed to the region should be in place by mid-March.
Meanwhile, the Fed's January minutes showed it largely united on holding interest rates steady, but divided over what comes next, with "several" open to rate hikes if inflation remains elevated, while others were inclined to support further cuts if inflation recedes.
The weekly jobless claims data, due later in the day, and Friday's Personal Consumption Expenditures report, the Fed's preferred inflation gauge, will provide further clues on the central bank's policy trajectory.
Non-yielding bullion tends to do well in low-interest-rate environments.
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