Gold Holds Above $4,700 as Fed, Gulf Risks Weighed

Key Moments

Geopolitics and Fed Signals Keep Gold Range-Bound

Gold (XAU/USD) trades with a modest downside bias during the Asian session on Thursday, yet the metal is managing to stay above the $4,700 threshold, halting the prior session’s retreat from a three-week peak. Market participants are grappling with conflicting forces: geopolitical jitters that are lending some support to the US Dollar and the Federal Reserve’s dovish stance that is curbing more aggressive USD buying and tempering pressure on the non-yielding metal.

Skepticism over the resilience of the ceasefire arrangement involving the United States and Iran is bolstering the Greenback and acting as a drag on gold. At the same time, the Fed’s outlook is restraining the scope for a sustained USD recovery, helping to limit the downside in XAU/USD despite the softer tone.

Escalating Tensions in Lebanon and Strait of Hormuz Disruptions

Israel has launched a broad series of air strikes across Lebanon, arguing that the ceasefire does not apply there due to Hezbollah’s involvement. According to the White House, Lebanon is not covered by the two-week ceasefire framework negotiated between Iran and the US.

In reaction, Iran has again shut shipping traffic through the key Strait of Hormuz and has warned that it may withdraw from the ceasefire if Israeli attacks in Lebanon continue. These developments are dampening optimism in broader markets and are supportive of the US Dollar, creating a challenging environment for gold prices.

Fed Minutes Highlight Higher-for-Longer Rates

Minutes from the Federal Open Market Committee’s March 17-18 meeting, released on Wednesday, indicate that officials favor keeping interest rates elevated for longer, reflecting concerns about upside inflation risks tied to energy price shocks emanating from the Middle East.

Policymakers nevertheless signaled expectations for one rate cut before year-end and another in 2027, although the specific timing was left open. This stance has capped the US Dollar’s rebound from the nearly one-month low reached the previous day, providing a measure of support to gold prices.

Key US Inflation Data in Focus

Traders appear cautious ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, due later in the North American session. The upcoming US Consumer Price Index (CPI) report on Friday is also expected to be scrutinized for additional clarity on the Fed’s policy path.

Both datasets are likely to influence US Dollar dynamics and could inject fresh volatility into gold. Given the mixed fundamental backdrop, market participants are wary of committing to strong intraday positions in XAU/USD until clearer directional signals emerge.

Technical Picture: Bearish Bias Intact Below Key Moving Average

On the 4-hour chart, XAU/USD is trading below the 200-period Simple Moving Average and the 50.0% retracement of the March decline, preserving a bearish technical tone. The Moving Average Convergence Divergence (MACD) indicator has moved into negative territory, while the Relative Strength Index (RSI) is hovering near a neutral 52 level. This configuration points to fading bullish momentum rather than the start of a strong new upward leg.

Market technicians are closely watching the $4,700 handle as a pivotal support area. A clear break below this level could accelerate selling pressure and open the door to deeper declines.

Key Technical Levels for XAU/USD

Initial support is identified near the 38.2% Fibonacci retracement around $4,604, with additional layers of demand seen at the 23.6% retracement close to $4,412 and the earlier swing low region around $4,102, where buyers are more likely to become active. On the upside, immediate resistance stands at the 50.0% Fibonacci retracement at $4,758. Above that, a more substantial barrier is located in the $4,895–$4,914 band, where the 200-period SMA aligns with the 61.8% retracement, ahead of the psychologically important $5,000 mark.