Gold traded near $4,790 on Friday after slipping from a one-month high of $4,871 earlier in the week. Price action stayed within a horizontal range between $4,600 and $4,850, with resistance near $4,850.
Markets awaited updates on US-Iran talks due to resume in Pakistan this weekend, alongside mild US Dollar weakness. A separate report cited Iranian sources saying negotiators were now aiming for a “temporary memorandum”.
On the four-hour chart, momentum indicators weakened, with the RSI near 50 and the MACD negative and falling. Resistance above $4,850 was followed by levels above $5,000 and the March 10 high at $5,238.
Support was seen around Wednesday’s and Thursday’s lows near $4,775. A break below $4,600 would open the March 26 lows near $4,350.
Central banks added 1,136 tonnes of gold worth around $70 billion in 2022, the highest yearly purchase since records began. Gold often moves inversely to the US Dollar and US Treasuries, and it is priced in dollars as XAU/USD.
Around this time last year, in April 2025, we saw gold stuck in a tight channel between $4,600 and $4,850. The market was whipsawed by conflicting reports about the US-Iran peace talks, creating a sideways market with fading bullish momentum. That range-bound action rewarded traders who were selling volatility.
Today, the picture has shifted from geopolitical hope to economic reality, with persistent inflation becoming the primary driver for precious metals. While last year’s market was news-driven, the latest US Consumer Price Index reading of 3.4% provides a strong fundamental reason for holding gold. This economic pressure creates a much firmer price floor than the diplomatic uncertainty we saw in 2025.
Last year’s sideways market was ideal for selling premium through strategies like iron condors. With implied volatility now higher, as seen in the CBOE Gold Volatility Index (GVZ) hovering near 18, such strategies carry more risk. We should therefore shift from profiting on stagnation to positioning for a potential breakout.
Given this inflationary backdrop, buying call options or establishing bullish call spreads appears to be a more prudent strategy for the coming weeks. This approach allows traders to capitalize on potential upside moves while keeping risk clearly defined. Consider targeting expirations in June or July to allow time for the trend to develop further.
This bullish outlook is reinforced by the massive and ongoing purchases from central banks. Recent World Gold Council data shows global central banks have added over 800 tonnes to their official gold reserves in the past twelve months. This powerful institutional demand provides a steady tailwind that simply wasn’t the main story during the choppy, news-driven trading of last year.
