Gold prices were little changed near $4,800 on Friday, as optimism over a possible peace agreement between the United States and Iran and renewed speculation about Federal Reserve rate cuts pulled the metal in opposing directions.
Spot gold traded around $4,807, up 0.35% on the day and on track for a fourth straight weekly gain, supported by a weaker U.S. dollar and shifting expectations for U.S. monetary policy.
Dollar weakens as risk appetite improves
Easing geopolitical tensions pushed the U.S. dollar lower, helping gold despite reduced safe-haven demand. The U.S. Dollar Index hovered near 98.13, its weakest level in more than a month and heading for a third consecutive weekly decline.
The dollar’s slide is improving the backdrop for dollar-priced assets, making them relatively more attractive to holders of other currencies as capital rotates out of traditional havens into risk assets.
Progress in U.S.–Iran talks under scrutiny
Market sentiment improved after President Donald Trump signaled ongoing talks with Iranian officials and the possibility of extending the current ceasefire if negotiations advance.
A Pakistani mediator involved in the discussions said a memorandum of understanding could be agreed soon, with a more comprehensive deal potentially within 60 days. The fragile two-week ceasefire is due to expire on April 21, leaving room for a rapid reversal in market moves if talks stall.
Strait of Hormuz and energy flows remain key
Despite diplomatic progress, gold continued to trade in a tight band as risk appetite rose. Traders remained focused on the status of the Strait of Hormuz, where restrictions by both U.S. and Iranian forces are still disrupting regional energy shipments.
The prospect of a fuller reopening of the route is central to the market’s reassessment of geopolitical risk and its knock-on effects for commodity prices and inflation.
Oil eases, inflation bets recalibrated
Oil prices retreated as geopolitical risk premiums faded. Brent crude futures slipped below $97 per barrel as traders scaled back expectations of supply disruptions from the Middle East.
Lower energy prices fed directly into weaker inflation projections, prompting markets to reassess the Fed’s policy path. The cooling inflation outlook has reinforced the view that the central bank could shift toward rate cuts later in the year, a scenario typically supportive for non-yielding assets such as gold.
Fed outlook: steady now, dovish later?
Futures markets are currently assigning a 94.8% probability that the Fed will keep rates unchanged at its April 28–29 meeting. Attention is centered on forward guidance, with traders watching for any language hinting at a more accommodative stance in the months ahead.
A later policy pivot, combined with a softer dollar, has historically created fertile conditions for alternative assets. That backdrop is of particular interest after digital asset markets saw total capitalization drop 20.4% in the first quarter of 2026.
Technical picture: consolidation with upside bias
On the charts, XAU/USD continued to trade above its 20-day simple moving average at $4,646, underscoring near-term support. Narrowing Bollinger Bands point to reduced volatility and raise the risk of a sharp breakout once the current range is resolved.
The Relative Strength Index hovered near 52, indicating balanced momentum, while the MACD remained in positive territory, signaling a modest bullish bias.
Key levels watched by traders
Resistance is clustered near the upper Bollinger Band around $4,931. Initial support sits at the 20-day moving average near $4,646, with deeper support seen around $4,361.
These levels define the ongoing consolidation as markets await clearer signals from Middle East diplomacy and fresh commentary from Fed officials ahead of the late-April policy decision.
Risks to the outlook
The current market narrative remains highly contingent on the U.S.–Iran talks. A breakdown in negotiations and a resumption of military posturing after the April 21 ceasefire deadline could quickly restore geopolitical risk premiums, drive oil and the dollar higher, and reshape conditions across global markets, including gold.
Curious how macro events ripple into digital assets? Explore Toobit’s perspective in this crypto market outlook next.
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