Gold (XAU/USD) traded below $4,750 in early European hours on Friday, within a familiar range. Price action showed limited bearish follow-through ahead of the latest US CPI release.
The US CPI report is expected to show inflation rose further in March, linked to higher crude oil prices. March 17–18 FOMC minutes said officials were not in a rush to cut rates, citing upside inflation risks from Middle East energy price shocks.
Geopolitical Risks And Inflation Pressures
Iran halted shipping through the Strait of Hormuz after Israeli attacks on Lebanon, and escalation risks were referenced by US President Donald Trump. Higher oil prices can add to inflation concerns, supporting a firmer USD and weighing on non-yielding gold.
Israeli Prime Minister Benjamin Netanyahu directed the start of direct talks with Lebanon, and a US State Department official said talks will take place next week in Washington, DC. US-Iran talks are scheduled in phases between late Friday night and Saturday, which may limit USD gains and gold losses.
Technically, gold remains below the 200-period 4-hour SMA near $4,883, close to the 61.8% retracement. RSI is near 56 and MACD is slightly negative; resistance is also at $4,908.40, then $5,131.50 and $5,415.69, while support sits at $4,751.70, then $4,595.00, $4,401.11, and $4,087.71.
We are seeing gold maintain a familiar and narrow trading range, very similar to the market indecision we navigated back in March of 2025. Just as traders then awaited crucial CPI figures, we are now focused on the upcoming Personal Consumption Expenditures (PCE) report to guide our next move. With the most recent March 2026 Consumer Price Index data coming in higher than expected at 3.8%, the market is on edge.
This persistent inflation is complicating the Federal Reserve’s policy path, echoing the concerns from last year when energy price shocks kept officials from cutting rates. This pressure has a direct impact on rate expectations, with fed fund futures now pricing in only two potential rate cuts for the remainder of 2026, a sharp reduction from the four cuts anticipated just a month ago. A hawkish Fed outlook typically weighs on non-yielding assets like gold.
Options Strategies In A Rangebound Market
However, a strong undercurrent of geopolitical tension is providing support for gold, preventing any significant sell-off. While our focus last year was on the Strait of Hormuz, today’s safe-haven bids are being driven by renewed friction in the South China Sea. This creates the same kind of push-pull dynamic we experienced in 2025, where monetary policy pressures prices down while global uncertainty puts a floor under them.
For derivative traders, this suggests that strategies benefiting from low volatility could be favorable in the immediate term. Selling options premium through strategies like iron condors or short strangles could be effective, allowing us to profit from the price remaining within its current, well-defined channel. The key is positioning the strike prices outside of the recent support and resistance levels.
The trigger for our next directional move will likely be a significant surprise in the economic data or a shift in the geopolitical landscape. A break below the $4,700 level, which has acted as solid support for three weeks, could signal a bearish move towards the levels we saw last fall. Conversely, a decisive push above the $4,850 resistance would suggest that safe-haven demand is overpowering concerns about interest rates.
