Gold prices stabilized above $4,700 per ounce in early London trade on Thursday, as a firmer dollar and reduced safe-haven demand offset lingering support from official sector buying. Spot gold opened at $4,705.97, according to LiteFinance data, after sliding from Monday's $4,763 level. The precious metal has traded within a narrow range this week, with investors reluctant to take large positions ahead of key US economic data and the Federal Reserve's policy meeting next week.
Dollar Strength and Easing Tensions Cap Gold's Upside
The dollar index climbed to 98.57, while US 10-year Treasury yields rose to 4.31% after hawkish comments from Fed chair nominee Kevin Warsh. The stronger dollar and higher yields make gold less attractive to international buyers and reduce its appeal as a non-yielding asset. Meanwhile, an extended ceasefire between the US and Iran has further dampened demand for gold as a safe haven. President Donald Trump has signaled openness to de-escalation, though the Strait of Hormuz remains partially closed.
Market Focus Shifts to US Data and Fed Meeting
Investors are now turning their attention to a series of US economic releases due later Thursday. The Labor Department will release weekly initial jobless claims at 8:30 a.m. ET, with economists expecting 212,000 new claims, up from 207,000 the previous week. Shortly after, S&P Global will release its preliminary April PMIs for manufacturing and services. The University of Michigan will round out the week with its final April inflation expectations on Friday.
These data points will be closely watched as they could influence the Federal Reserve's interest rate decision at its April 28-29 meeting. The Fed held its key rate steady at 3.50%-3.75% in March, citing uncertainty from higher energy prices linked to the US-Iran conflict. According to CME Group's FedWatch tool, the probability of another rate hold next week stands at approximately 99.5%.
Central Bank Buying Slows
Official sector purchases, which have been a key driver of gold's rally in 2024 and 2025, are showing signs of slowing. In January, central banks netted just 5 tonnes of gold, compared with a monthly average of 27 tonnes in 2025, according to the World Gold Council. Uzbekistan was the top buyer, while Russia sold 9 tonnes, marking the largest sale. China's reserves continued to grow, albeit at a slower pace.
Analyst Views and Technical Levels
Despite the recent pullback, gold remains up about 44% year-over-year, though it is trading around 14% below its January record high of $5,595.42. Analysts remain cautiously optimistic. UBS maintains a $5,000 average price target for 2026, while JPMorgan and Standard Chartered have targets of $4,753 and $4,800, respectively. Bank of America's Michael Widmer sees an average of $4,538, citing ongoing safe-haven demand and fiscal risks.
From a technical perspective, spot gold has faced resistance at $4,800 three times, according to Finance Magnates analyst Damian Chmiel. He identifies the 200-day moving average around $4,346 as a key support level if the $4,800 resistance holds.
Outlook and Risks
The near-term outlook for gold hinges on the Fed's tone next week. A hawkish stance from Chair Jerome Powell, particularly if inflation data heats up amid rising oil prices, could push the dollar higher and weigh on gold. Conversely, softer jobs data or any dovish signals could reignite gold's rally toward its January peak. For now, gold remains wedged in the middle of its 52-week range of $3,120.52 to $5,595.46, reflecting a market that is balanced but poised for a breakout in either direction.
