Gold rose from an intraday low of $4,684 to about $4,730 as the US Dollar eased. The Dollar Index traded near 98.57 after reaching 98.80.
Inflation concerns persisted as tensions rose in the Strait of Hormuz, where shipping faces a dual blockade by the US Navy and Iran. Donald Trump said the US has “total control” of the strait and ordered the Navy to “shoot any boat putting mines in Hormuz”.
Strait Of Hormuz Risks
The Washington Post, citing a Pentagon assessment, reported it could take up to six months to fully clear mines. The IRGC reportedly seized two vessels on Wednesday, according to shipping companies and Tasnim.
Higher Oil prices have added to expectations that interest rates stay high for longer, which can limit demand for non-yielding Gold. Markets remain doubtful about near-term US-Iran talks despite a ceasefire extension that Iranian officials have not formally accepted.
US data showed Initial Jobless Claims at 214K versus 212K expected and 208K prior. S&P Global Manufacturing PMI rose to 54 from 52.3, a 47-month high, while Services PMI rose to 51.3 from 49.8.
On the 4-hour chart, XAU/USD is below the 20-period SMA near $4,756, with RSI (14) around 41 and ATR (14) near 38. Support is near $4,677 and resistance near $4,834.
Technical Levels And Macro Drivers
Given the persistent inflation, we see gold’s role as a hedge being overshadowed by the prospect of higher interest rates for longer. The March 2026 Consumer Price Index (CPI) report, which showed a year-over-year increase of 4.1%, confirms that price pressures are not easing as the Federal Reserve had hoped. This makes holding non-yielding gold costly when investors can get better returns from bonds.
The primary driver for this inflation remains the ongoing shipping disruptions in the Strait of Hormuz, which are keeping oil prices elevated. With WTI crude trading stubbornly above $115 a barrel, energy costs are feeding directly into the prices of goods and services globally. This situation shows no sign of a quick resolution, meaning we should expect inflation to remain a key concern for central banks.
Looking back from today, we can see how the aggressive rate hikes throughout 2025 were a direct response to this emerging energy crisis. Those actions set the stage for the current environment where the Fed has little room to consider rate cuts. Recent comments from Fed officials have reinforced this hawkish stance, signaling that fighting inflation remains their top priority.
For derivative traders, this outlook suggests that bearish positions on gold are warranted in the coming weeks. We believe buying put options on gold futures or related ETFs offers a defined-risk way to profit from a potential slide below the $4,677 support level. Selling call spreads with strike prices above the $4,834 resistance could also be an effective strategy to collect premium while betting on capped upside.
The sustained geopolitical tension means we should also expect gold volatility to remain elevated, even if the price trends downward. The Cboe Gold Volatility Index (GVZ) has been holding above 20, a level not seen consistently since the market turmoil of early 2025. This makes strategies that profit from high implied volatility, such as short strangles or straddles centered around a key price level, potentially attractive.
Finally, the strong US Dollar continues to be a major headwind for gold, as a stronger greenback makes the dollar-denominated metal more expensive for foreign buyers. As long as the Fed maintains its tight monetary policy, the dollar is likely to remain supported. A pair trade, going long US Dollar Index futures while simultaneously shorting gold futures, could be an effective way to leverage this macroeconomic trend.
