Gold’s Volatile Week Hinges on Inflation Data Amid Geopolitical Whiplash

The gold market is caught in a tug-of-war between fading geopolitical tensions and looming inflation data, resulting in a week of sharp volatility. Prices briefly surged to a three-week high of $4,850 per troy ounce following news of a two-week US-Iran ceasefire, only to retreat back into a $4,700-$4,800 range. The immediate catalyst for direction now rests with the US Consumer Price Index (CPI) report for March, which will fully capture the recent oil price shock from Middle East conflicts.

Investor relief over the ceasefire, which included provisions to reopen the Strait of Hormuz, proved short-lived. Iranian media reported that oil tanker transit through the critical waterway was halted again after Israeli attacks on Lebanon. A senior Iranian official stated three clauses of the agreement had already been violated, causing oil prices to rebound. West Texas Intermediate crude jumped 5.4% to $99.44 per barrel. “Optimism over the ceasefire faded after Tehran stated several conditions of the agreement had been violated,” wrote analysts at ING.

This geopolitical whiplash underscores a deeper macroeconomic dilemma facing the Federal Reserve. The central bank’s recently released March meeting minutes revealed policymakers are concerned that Middle East tensions could lead to persistent inflation, yet they still anticipate an interest rate cut this year. Economist Alvin Liew from UOB interprets the minutes as signaling a divided Fed, with a majority focusing more on the labor market than inflation. UOB forecasts a pause until April, followed by two cuts in June and the third quarter of 2026, which would bring the key rate to 3.25% by year-end.

Supporting gold, falling bond yields provided a tailwind. The yield on the benchmark 10-year US Treasury note dropped nine basis points to 4.253%. However, the market now views an April rate cut as off the table, according to CME Group data, limiting the metal’s near-term upside.

Should investors sell immediately? Or is it worth buying Goldpreis LBMA?

The upcoming March CPI is pivotal because it is the first inflation reading to fully reflect the period after the oil price spike. The February annual rate stood at 2.4%, with energy a primary contributor to the monthly increase. A surprisingly high print today would dampen rate-cut hopes and could push gold below the $4,700 mark. A moderate figure, conversely, could pave the way toward $4,850, with the 50-day moving average around $4,980 coming into view.

Beyond daily headlines, a significant shift in capital flows is evident. The World Gold Council reported net outflows of $13 billion from North America in March, a historic record that ended a nine-month inflow streak. US investors primarily sold positions to secure much-needed liquidity amid broader market turbulence, while Asian buyers had acted as a stabilizing force in prior months.

Technically, the precious metal is consolidating within a narrow band. The area around $4,700 serves as solid support, with noticeable resistance waiting at $4,800. As long as the Strait of Hormuz remains effectively closed, the structural safe-haven demand for gold is likely to stay intact, setting the stage for its next decisive move based on the inflation data.