Gold prices traded in a narrow band on Thursday, as markets balanced progress in U.S.-Iran peace efforts against persistent inflation pressures.
Spot prices hovered around $4,816, after briefly touching a session high of $4,838. Gains were capped by a firmer U.S. dollar, even as geopolitical headlines kept demand for safety in focus.
Gold remains about 10% below its peak reached during the height of recent conflict, underlining how expectations for a diplomatic breakthrough are tempering demand for traditional havens.
Gold price steady near recent highs
Gold prices traded in a narrow band on Thursday, as markets balanced progress in U.S.-Iran peace efforts against persistent inflation pressures.
Spot prices hovered around $4,816, after briefly touching a session high of $4,838. Gains were capped by a firmer U.S. dollar, even as geopolitical headlines kept demand for safety in focus.
Gold remains about 10% below its peak reached during the height of recent conflict, underlining how expectations for a diplomatic breakthrough are tempering demand for traditional havens.
Ceasefire negotiations drive sentiment
Diplomatic developments between Washington and Tehran remain the main driver for gold.
Officials are working to extend a two-week ceasefire as negotiations continue. White House Press Secretary Leavitt described the talks with Iran as “ongoing” and “productive,” while rejecting reports that the U.S. had formally requested an extension beyond the April 21 deadline.
Pakistan’s Army Chief Munir arrived in Tehran this week carrying a message from Washington, following comments from President Trump that negotiations could resume after earlier talks in Islamabad ended without agreement.
An Iranian source said Munir’s visit helped narrow differences but confirmed that significant gaps remain, particularly on nuclear issues.
Oil, inflation and the federal reserve outlook
While hopes of a deal are reducing immediate demand for safe-haven assets, the economic fallout from the conflict is still feeding inflation.
Crude prices have eased from recent highs but remain elevated, with supply through the Strait of Hormuz disrupted by a dual blockade. This keeps inflation risks in focus even as markets price in a relatively steady path for interest rates.
The March Consumer Price Index rose to 3.3%, the highest level in nearly two years, driven by a more than 20% monthly surge in gasoline prices.
Federal Reserve official Musalem said current shocks are shaping the central bank’s inflation outlook and that core inflation is likely to remain near 3% through year-end. He added that the existing policy rate of 3.50%–3.75% “remains appropriate for the near term.”
Dollar softens as safe-haven demand eases
Growing expectations of a diplomatic breakthrough have also weighed on the U.S. dollar.
The U.S. Dollar Index is hovering near six-week lows around 98.00. Despite a small daily rise to 98.2016, the index is still down about 1.38% over the past month, reflecting a cautious shift away from flight-to-safety positioning as traders anticipate possible progress in the talks.
Market tension: peace premium versus inflation hedge
Gold is caught between competing forces.
On one side, optimism over a potential U.S.-Iran agreement is pressuring safe-haven demand and arguing for lower prices. On the other, persistently high oil prices and above-target inflation are supporting demand for assets used as a hedge against geopolitical risk and currency debasement.
The result is a fragile stability. Traders face an environment in which gold’s muted price action masks the likelihood of a sharp move once a clear diplomatic outcome emerges. A failure in talks could rapidly intensify oil-driven inflation fears and lift gold, while a credible peace deal could trigger a retreat from safety and weigh on prices.
Technical picture: range-bound with clear triggers
Technical indicators underline the current stalemate.
- Gold remains capped below the 50-day simple moving average (SMA) at $4,898, which is acting as near-term resistance.
- The 100-day SMA around $4,708 is providing immediate support.
- The Relative Strength Index sits near 53, signaling neutral momentum and consolidation.
- The Average Directional Index at 24 points to weak trend strength, consistent with a sideways market.
Analysts say a sustained break below $4,708 would signal renewed downward pressure and could open the way to deeper losses. Conversely, a daily close above $4,898 would suggest buyers are regaining control and may attempt to push prices toward prior peaks.
For now, gold remains tightly coiled within its technical boundaries, with the trajectory of U.S.-Iran diplomacy poised to determine the next decisive move.
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