Gold has stayed relatively stable amid mixed geopolitical news, including reports of a potential 45-day ceasefire and renewed threats linked to reopening the Strait of Hormuz. The metal is described as being in a corrective phase.
US 10-year real yields hovering near 2% are weighing on gold and limiting recovery. The lack of a clear de-escalation in the Middle East is adding uncertainty.
In the near term, gold is expected to trade within a USD 4500-5000 range. Price direction is expected to depend on further geopolitical developments and possible US dollar weakness.
A breakout is framed as dependent on shifts in geopolitics, a retreat in real yields, or sustained dollar softness. Otherwise, upside moves are expected to remain limited.
Gold appears to be in a holding pattern, caught between supportive geopolitical risks and the heavy pressure of high US real yields. With US 10-year real yields firm around 1.95% as of early April 2026, any major price advance is being stifled. This creates a range-bound environment where the metal is likely to trade sideways.
We saw a similar dynamic play out in 2025, when conflicting reports about a ceasefire and threats in the Strait of Hormuz kept gold pinned. Even then, the dominant force capping the upside was the persistent strength in real yields. This historical pattern reinforces our current view that yields remain the primary obstacle for gold bulls.
Given this outlook, selling out-of-the-money puts near the bottom of the expected USD 4,500-5,000 range is a viable strategy for collecting premium. This approach benefits from the current environment, as implied volatility on gold options has recently eased to a three-month low of 16%. The strategy capitalizes on the view that strong underlying support will prevent a significant price breakdown.
To position for the upside skew, traders can consider using bull call spreads. This defined-risk strategy allows for participation in a potential breakout, which would likely be triggered by a weakening of the US dollar from its current index level of 106 or a new geopolitical flare-up. The options market shows the six-month call-put skew remains positive, indicating a continued bias for upside exposure over the medium term.
Underlying this entire picture is the steady demand from the official sector, which continues to provide a solid floor for the market. Central banks added a net 88 tonnes to reserves in the first quarter of 2026, continuing a trend of strong buying seen throughout the last few years. This consistent purchasing strengthens the case for selling puts on dips toward the USD 4,500 support level.
