Gold bulls seem reluctant near $4,800 as inflation concerns counter retreating USD

• Gold attracts some dip-buyers following a bearish gap opening, though it lacks follow-through.
• Renewed US-Iran tensions provided a modest lift to the USD and weighed on the precious metal.
• Fading Fed rate hike bets keep a lid on any further USD appreciation and support the bullion.

Gold (XAU/USD) looks to build on its modest intraday recovery from the $4,737-$4,738 region or a one-week low touched earlier this Monday, and trades around the $4,800 mark heading into the European session. The US Dollar (USD) retreats from a one-week high and, for now, seems to have stalled its recovery move from a nearly two-month low set on Friday. This turns out to be a key factor lending some support to the commodity. However, an intraday rally in Crude Oil prices revived inflationary concerns and triggered a modest rise in US Treasury bond yields, which, in turn, might keep a lid on any meaningful upside for the non-yielding yellow metal.

The US-Iran standoff over the Strait of Hormuz tempers hopes for more peace talks before the current ceasefire ends on April 22. The US Navy intercepted and seized an Iranian-flagged cargo ship in the Gulf of Oman as part of its blockade. Iran viewed this as a breach of the ceasefire agreement and once again closed the strategic waterway after briefly opening it following a 10-day truce between Israel and the Lebanese group Hezbollah on Friday. Meanwhile, US President Donald Trump said that the naval blockade of Iranian ports would continue until a peace deal was agreed between the two countries.

The White House confirmed that US Vice President JD Vance would lead another delegation for a second round of talks on ending the war with Iran. Iranian state media has reported that officials will not participate while the US blockade remains in place. This dampens hopes for a peace agreement before the current ceasefire ends on April 22, which, in turn, triggers a fresh wave of the global risk-aversion trade and benefits the Greenback reserve currency status. The USD bulls, however, refrain from placing aggressive bets amid diminishing odds for an interest rate hike by the US Federal Reserve (Fed).

Instead, the CME Group’s FedWatch Tool indicates that there is a roughly 40% chance of a Fed rate cut by the year-end, which keeps a lid on any meaningful USD appreciation and acts as a tailwind for the non-yielding Gold. The lack of follow-through buying, however, warrants some caution before positioning for the resumption of the precious metal’s recent move up from the March swing low, around the $4,100 mark. There isn’t any relevant market-moving economic data due for release from the US, leaving the USD and the commodity at the mercy of fresh developments surrounding the US-Iran saga.

XAU/USD 1-hour chart

Gold bulls await sustained strength and acceptance above 100-hour SMA/$4,800

The XAU/USD pair struggles to capitalize on the intraday recovery beyond the 100-hour Simple Moving Average (SMA) or find acceptance above the $4,800 mark. Moreover, the Relative Strength Index (RSI) around 44 hints at fading upside momentum, while the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with the line below its signal and a negative histogram. This reinforces the idea that sellers retain control unless the Gold can push decisively back over the nearby average.

The said SMA at $4,805.60 is the first and only clear resistance, and a sustained break above this barrier would be needed to ease the current downside bias and open the door for a stronger recovery. As long as the XAU/USD pair trades under the said barrier, rallies are likely to face selling interest rather than signal a durable bullish reversal.