Gold eased from a nearly four-week high and held above $4,800 as the US dollar recovered from its lowest level since early March. Uncertainty over a lasting US-Iran agreement, plus tension around the Strait of Hormuz, supported the dollar and weighed on gold.
Iran’s UN ambassador said the US blockade that began on Monday was a grave violation of sovereignty, and the IRGC said it would retaliate. US Vice President JD Vance said Washington is pursuing a broader deal on Iran’s economic integration, and UN Secretary-General António Guterres said renewed US-Iran talks are highly probable.
US inflation data weakened the case for tighter policy and helped limit dollar strength. March PPI rose to 4% year on year from 3.4%, and to 0.5% month on month, while PPI excluding Food & Energy was 3.8% year on year.
Technically, gold retained a bullish bias near the 200-period SMA on the 4-hour chart. RSI was 65.5 and MACD remained positive, with resistance at $4,912.54, then $5,134.37 and $5,416.94, while support sits at $4,756.73, then $4,600.92 and $4,408.14.
Looking back at 2025, we saw gold benefit from hopes of a diplomatic breakthrough with Iran and softer producer price readings. However, the situation in April 2026 is different, as the most recent Consumer Price Index (CPI) report for March showed inflation holding firm at 3.4% year-over-year. This persistent inflation has forced a significant repricing of Federal Reserve rate cut expectations, with markets now only pricing in one cut this year.
This shift in monetary policy expectations is strengthening the US Dollar, which typically acts as a headwind for gold prices. Despite this, persistent instability in the Strait of Hormuz, with at least three commercial vessels being targeted in the first quarter of 2026, continues to provide a strong geopolitical floor for the metal. This creates a classic conflict for gold between a hawkish Fed and its safe-haven appeal.
Given these opposing forces, we anticipate elevated volatility in the coming weeks. The CBOE Gold Volatility Index (GVZ) has already climbed over 15% since the start of the year, reflecting this uncertainty. Traders could consider long volatility strategies, such as straddles or strangles, to profit from a significant price move in either direction without needing to predict the outcome of Fed policy or geopolitical events.
For traders with a bullish conviction, buying call options or call spreads offers a way to participate in upside potential while capping risk. This could be a prudent way to play a breakout above the key resistance level of $4,912. Conversely, those anticipating a pullback due to the strong dollar could use put options to hedge long positions or speculate on a move back towards the $4,756 support level.
