Gold Price Forecast
Gold prices fell on Thursday to approach the $4,700 per ounce level, amid a sense of caution in the markets ahead of the upcoming U.S.-Iran talks on Friday, as well as the release of key U.S. inflation data.
Investors are awaiting the release of the Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve’s preferred measure of inflation, given its direct impact on interest rate decisions in the coming period.
Temporary Truce Supports Gold, but Concerns Persist
Gold prices recorded a notable rise during yesterday’s session, supported by the announcement of a truce between the United States and Iran, which bolstered expectations that central banks might resume cutting interest rates and halt the reduction of gold reserves.
However, this momentum did not last long, as prices fell slightly at the start of today’s trading, affected by uncertainty regarding the ceasefire’s durability, especially after the occupying entity targeted civilians in Lebanon, killing more than 250 people, amid Iran’s moves to assert control over the Strait of Hormuz following the breach of the agreement, which also included Lebanon.
These developments are reigniting concerns about rising energy prices, which could lead to additional inflationary pressures, negatively impacting investor sentiment in the gold market.
Fed Policies Weigh on Gold
On the monetary policy front, the minutes of the Federal Reserve’s March meeting revealed that most policymakers believe the pace of inflation’s decline may be slower than previously expected, which could prompt the central bank to keep interest rates high for a longer period.
These expectations are increasing pressure on gold, which is typically negatively affected by rising interest rates, given that it is a non-yielding asset.
Will gold regain its upward trend?
Despite the current declines, the medium-term outlook for gold remains positive, with indicators suggesting prices could test new record highs in 2026 as global geopolitical tensions persist.
Flows into gold exchange-traded funds (ETFs) also began turning positive in April, which could provide additional support for prices if this trend continues.
In addition, central banks around the world continue to buy gold at a strong pace, reinforcing a solid price floor that could limit any sharp declines.
Ultimately, gold is currently trading in a sensitive range, where pressures stemming from Fed policy are balanced by support from geopolitical tensions and rising institutional demand.
With the release of U.S. inflation data on the horizon, markets may see significant movements that will determine the precious metal’s next direction.
