Gold Price Slips as Hormuz Risk Fuels Inflation Concerns Ahead of US CPI Data
Gold prices edged lower during the Asian session after failing to break above the key $4,800 resistance level in the previous trading day. The precious metal dropped toward the $4,738–$4,737 range, although downside momentum remains limited as traders await the latest US Consumer Price Index (CPI) data for clearer direction.
From a technical perspective, the XAU/USD pair maintains a neutral to slightly bearish bias, trading well below the 200-period Simple Moving Average (SMA) on the 4-hour chart. This resistance aligns with the 61.8% Fibonacci retracement level of the March decline, making it a crucial pivot point for price action.
Meanwhile, the Relative Strength Index (RSI) near 56 signals moderate underlying demand following the recent pullback. However, the Moving Average Convergence Divergence (MACD) has dipped slightly into negative territory, indicating weakening bullish momentum and reinforcing the strong resistance near the 200-period SMA at $4,883.
A sustained breakout above this zone could open the door toward $4,908.40, followed by higher targets at $5,131.50 and $5,415.69.
On the downside, immediate support lies at the 50% Fibonacci retracement level of $4,751.70. A break below this level may expose further declines toward $4,595.00 and $4,401.11, with stronger structural support seen near $4,087.71.
Rising Oil Prices and Fed Hawkish Bets Weigh on Gold Outlook
Market attention is now firmly on the upcoming US CPI report, which is expected to show a further rise in inflation for March, largely driven by surging crude oil prices amid ongoing geopolitical tensions. This scenario could push the Federal Reserve (Fed) to delay interest rate cuts.
The recently released FOMC meeting minutes (March 17–18) highlighted that policymakers are in no rush to ease monetary policy, citing inflation risks stemming from energy price shocks linked to Middle East conflicts.
At the same time, escalating tensions around the Strait of Hormuz have supported the US Dollar (USD), putting additional pressure on non-yielding assets like gold.
Iran’s decision to halt shipping traffic through the strategic waterway, in response to Israeli strikes in Lebanon, has intensified market uncertainty. Former US President Donald Trump also criticized Iran’s handling of oil transit in the region and warned of potential new military action if negotiations fail, signaling that escalation risks remain high.
These developments have boosted crude oil prices, fueling inflation concerns and strengthening expectations of a hawkish Fed stance—factors that continue to weigh on gold prices. However, the lack of aggressive follow-through selling suggests bearish traders should remain cautious.
Geopolitical Talks Could Limit Gold Downside
On the diplomatic front, Israeli Prime Minister Benjamin Netanyahu stated that direct negotiations with Lebanon would begin soon to address key disputes under the fragile US-Iran ceasefire framework.
A US State Department official confirmed that Lebanon-Israel talks are expected to take place next week in Washington, D.C. Additionally, crucial US-Iran discussions are scheduled to unfold gradually from Friday evening into Saturday.
These developments keep hopes alive for a more stable ceasefire, which could cap further gains in the US Dollar and help limit deeper losses in gold prices.