Gold prices climbed 2.3% for the week, settling at $4,719.68 an ounce on Friday, as optimism around a potential U.S.-Iran agreement helped cool inflation worries and weighed on the dollar. U.S. gold futures ended 0.4% higher at $4,730.70, notching a fourth consecutive daily gain and the strongest weekly performance since mid-April.
The precious metal bounced back from its lowest point in a month, driven by safe-haven demand amid the Gulf conflict and expectations that a diplomatic resolution could ease the oil price shock and reduce pressure on the Federal Reserve. However, the rally faces a tricky backdrop: higher rates and stronger real yields make holding non-yielding gold more expensive, while the metal’s recent moves have increasingly resembled those of a risk asset, according to David Meger, director of metals trading at High Ridge Futures.
Key technical levels are in focus. Spot gold hovered just below the $4,778-$4,780 zone, where the 100-day and 50-day simple moving averages converge. FXStreet analyst Dhwani Mehta flagged that a daily close above that range is needed to sustain bullish momentum. Support lies near $4,713 and the 21-day moving average at $4,697.84. Bulls are eyeing a decisive push above $4,800-$4,900, while a break below $4,400 could signal renewed weakness.
U.S. economic data added complexity. April payrolls grew by 115,000, beating the 62,000 forecast in a Reuters poll, while the unemployment rate held at 4.3%. That labor market resilience gives the Fed little urgency to cut rates, keeping policymakers cautious. Upcoming U.S. inflation and retail sales figures next week could shift expectations around monetary policy, influencing gold’s trajectory.
Physical demand presented a mixed picture. Indian buyers showed subdued interest due to elevated prices, even during the wedding season, while Chinese premiums held steady at $14 to $20 an ounce above global benchmarks, driven by investment and safe-haven demand amid inflation and Middle East concerns, according to Peter Fung, head of dealing at Wing Fung Precious Metals. China’s central bank extended its gold buying streak to 18 consecutive months in April, per People’s Bank of China data, underpinning forecasts of a 2026 median gold price of $4,916 an ounce—the highest annual projection in Reuters polls since 2012.
Analysts remain cautious. StoneX’s Rhona O’Connell noted that a ceasefire could spark a relief rally but called $5,500 “too rich.” Julius Baer’s Carsten Menke pointed to potential renewed investment demand if hopes for Fed easing return. Other precious metals also gained: spot silver advanced 2.5% to $80.40, platinum rose 1.3% to $2,047.88, while palladium edged down 0.5% to $1,487.71.
The central risk remains a collapse of the Gulf truce or another energy price spike. Over the weekend, Reuters reported that the U.S. and Iran remain deadlocked after fresh clashes in the Gulf, with Washington awaiting Tehran’s response to its proposal as renewed missile and drone strikes target the United Arab Emirates. For now, gold must defend the $4,700 zone to keep its recovery alive, with upside targets at $4,780, $4,850, and $4,900. A hot inflation reading, a firmer dollar, or higher oil could push bullion back toward $4,600-$4,570, while a meaningful Iran agreement and weaker U.S. data would bring $4,900 back into play.
