Gold’s Precarious Balance: A Ceasefire Deadline and a $5,400 Forecast

The price of gold is caught in a tense standoff, mirroring the geopolitical drama that currently defines its trajectory. As a critical US-Iran ceasefire officially expires, spot gold is trading at $4,759 per ounce, a decline of roughly $23 from the previous close. Both sides are hesitating to extend the fragile truce without a signed agreement, injecting fresh uncertainty into a market already grappling with conflicting monetary signals.

This nervousness follows a failed second round of negotiations, despite President Donald Trump extending the initial weapons pause. Iran’s refusal to open the Strait of Hormuz and its demand for the US Navy to halt interventions have stalled diplomacy. The political noise has driven investors back toward the traditional safe haven, with spot gold posting a daily gain of about one percent earlier in the week to climb back above $4,750.

Beneath the immediate geopolitical tension, a paradoxical monetary backdrop is at play. Rising energy prices, fueled by Middle East risks, are pushing inflation expectations higher. Yet the Federal Reserve appears locked in place, with markets pricing in a near-100% probability of unchanged interest rates at its April meeting, likely holding the benchmark rate at 3.50% to 3.75%. This combination—potential inflation alongside a strong dollar and expectations of sustained higher rates—creates a headwind for non-yielding bullion. Since late February, when US and Israeli strikes on Iran began, gold has fallen approximately 8 percent.

Amidst this short-term pressure, a powerful institutional undercurrent continues to support the market. Major banks are maintaining bullish long-term forecasts. Goldman Sachs is holding firm to its year-end target of $5,400 per ounce, while peers like JPMorgan, Wells Fargo, UBS, and Bank of America project targets even exceeding $6,000. Their confidence is partly rooted in consistent central bank demand. Institutions are treating the recent price correction as a buying opportunity, with Poland adding 11 tonnes recently, Uzbekistan 9 tonnes, and China 5 tonnes. Central banks globally are purchasing roughly 60 tonnes of the metal each month.

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

ETF flows are also showing signs of a turnaround. For the week ending April 17, global gold ETFs saw inflows of 21.7 tonnes, marking the third consecutive week of positive movement. The year-to-date net inflow now stands at 117.4 tonnes, though this has not yet fully offset the substantial outflows of 89.6 tonnes recorded in March. The regional picture is mixed: Chinese gold ETFs have seen year-to-date inflows of $8.1 billion, while US products have suffered outflows exceeding $2 billion.

Technically, gold is in a consolidation phase, trading notably below its pre-conflict levels. Key moving averages—the 5-day at $4,813 and the 50-day near $4,810—both reside above the current spot price, while the RSI sits at a neutral 46. For traders, the immediate resistance zone is around $4,937, with critical support holding at $4,645. The trading range for the current session is seen between $4,761 and $4,882.

The immediate binary risk is clear: a collapse of the ceasefire without a deal could trigger a sharp upward breakout for gold, provided oil prices remain below $100 per barrel. All eyes are on Islamabad for a signal of either extension or escalation. Beyond geopolitics, the market’s next fundamental test arrives with upcoming US data, including the April Purchasing Managers’ Indexes, weekly jobless claims, and the University of Michigan’s inflation report. Higher-than-expected price projections could further increase political pressure on a Federal Reserve already facing scrutiny over its independence from the Justice Department.