PRECIOUS-Gold advances on US–Iran tensions as markets weigh Fed policy path

By Pablo Sinha

Feb 19 (Reuters) - Gold prices extended gains on Thursday after rising more than 2% 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 XAU= rose 0.7% to $5,012.83 per ounce by 0634 GMT. U.S. gold futures GCcv1 for April delivery were up 0.4% at $5,031.20.

"Geopolitical concerns are front and centre with reports that if the U.S. 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.

FED LARGELY UNITED

Top U.S. national security advisers met in the White House Situation Room on Wednesday to discuss Iran and were told all U.S. military forces deployed to the region should be in place by mid-March.

Meanwhile, the January minutes showed the Fed 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.

Spot silver XAG= rose 2.7% to $79.24 per ounce after climbing more than 5% on Wednesday.

Silver is "supported by tight supply and low COMEX stock levels ahead of the delivery period of the March contract. However, given the extent of the historic correction earlier this month, silver is not back on safer ground until it trades back above $86," said Ole Hansen, head of commodity strategy at Saxo Bank.

Spot platinum XPT= gained 1.4% to $2,100.45 per ounce, while palladium XPD= rose 1% to $1,733.45.