Gold Price Stalls Amid Middle East Uncertainty Ahead of US Inflation Data
Gold prices struggled to find clear direction during Thursday’s Asian session, hovering near the $4,700 level as traders awaited fresh catalysts. Market sentiment remained cautious amid lingering doubts over the US-Iran ceasefire agreement and ongoing tensions surrounding the Strait of Hormuz.
Technically, gold continues to consolidate with a neutral-to-slightly bearish bias. Prices are holding above the 21-day and 100-day Simple Moving Averages (SMA), located near $4,710 and $4,674, respectively, but remain capped below the 50-day SMA around $4,914. This setup suggests a short-term pullback within a broader uptrend, though momentum remains weak. The Relative Strength Index (RSI 14) is hovering just below the 50 mark, signaling a lack of strong directional momentum.
On the upside, immediate resistance is seen at the 50-day SMA near $4,913. A daily close above this level could reignite bullish momentum and push gold toward recent highs. On the downside, initial support lies at the 21-day SMA around $4,710, followed by the 100-day SMA near $4,674. A deeper decline could test the 200-day SMA at approximately $4,172, marking a key medium-term support zone.
Risk sentiment weakened early Thursday, boosting demand for the safe-haven US Dollar (USD) and putting pressure on gold prices. The greenback extended its recovery after previous losses triggered by temporary optimism over a Middle East ceasefire.
However, uncertainty surrounding the ceasefire continues to cloud market outlook. Ongoing Israeli strikes against Iran-backed Hezbollah forces in Lebanon have raised doubts about the scope of the agreement. While Iran’s Foreign Minister Abbas Araghchi stated that the ceasefire includes Lebanon, US Vice President JD Vance denied such claims, citing statements from President Donald Trump and Israeli Prime Minister Benjamin Netanyahu indicating otherwise.
Further escalating tensions, Iran reportedly halted oil tanker traffic through the Strait of Hormuz following renewed Israeli attacks in Beirut, reversing a brief reopening during the two-week ceasefire period. Meanwhile, Hezbollah claimed responsibility for launching rockets into northern Israel in response to what it described as ceasefire violations.
The fragile US-Iran ceasefire and uncertainty over Hormuz shipping routes have reignited geopolitical concerns, supporting oil prices while adding bearish pressure to gold in the short term.
On the macroeconomic front, dovish signals from the Federal Reserve’s March meeting minutes provided some temporary relief for gold. Policymakers indicated that interest rate cuts may be appropriate if inflation continues to ease as expected.
Investors now turn their attention to key US economic data, including the final Q4 GDP reading, Core PCE Price Index, and weekly jobless claims. However, February’s PCE data may have limited market impact as it does not reflect the latest geopolitical developments.
The primary focus will shift to Friday’s US Consumer Price Index (CPI) data for March, which is expected to offer clearer insight into inflation trends and the domestic impact of rising Middle East tensions under President Trump. This data could play a crucial role in shaping the outlook for the US Dollar and gold prices.
In the meantime, geopolitical headlines are likely to remain the dominant driver of market sentiment and gold price movements.