What's next for gold? Geopolitics, the Fed and the $5,044 breakout level to watch

A tentative recovery, but scars from March remain

Gold trades at approximately US$4,800/oz on Tuesday morning Asia time, trimming last week's 2% advance. The recovery followed a temporary easing of tensions in the Strait of Hormuz, which alleviated inflationary concerns and rekindled expectations for Federal Reserve (Fed) rate cuts. Dollar weakness provided an additional tailwind, with the DXY index declining 0.56% on the week.

Despite the improvement, gold remains approximately 9% below its 27 February pre-war level — a stark contrast to the S&P 500, which has recovered to trade 3% above that baseline.

Momentum indicators improved broadly: futures longs rebounded, exchange-traded fund (ETF) inflows accelerated, and options traders ramped up bullish bets. ETF flows turned positive for a third consecutive week, with 21.7 tonnes added in the week ending 17 April, bringing the year-to-date (YTD) net inflow to 117.4 tonnes. The overhang from March nonetheless persists — those inflows have yet to recover the 89.6 tonnes of outflows recorded last month.

Gold ETF weekly flows by region

Central bank demand: a distorted picture in March

The structural trend of central bank net buying remains intact, with February World Gold Council data showing net purchases of 27 tonnes, in line with the 2025 monthly average. March, however, presented a distorted picture. Poland added 11 tonnes, China 5 tonnes, and Uzbekistan 9 tonnes, each treating the price correction as a buying opportunity. However, their combined purchases were far outweighed by Turkey's 118-tonne drawdown, per central bank data, deployed through outright sales and swap operations to defend the lira amid soaring energy import costs. Turkey's central bank governor Karahan has indicated the swap portion will be returned upon maturity, suggesting that the drawdown is more of a financing response to an acute foreign exchange squeeze rather than a strategic retreat from gold.

Near-term direction tied to geopolitical headlines

The dominant near-term driver remains the trajectory of US–Iran negotiations. The current ceasefire expires on Wednesday night Eastern time, with the second round of direct talks yet to be confirmed. Further de-escalation would support non-yielding assets; a breakdown would reinstate the risk premium that proved so damaging to gold in March.

Kevin Warsh's Senate confirmation hearing as Fed Chair nominee on Tuesday adds another variable. His historically hawkish stance on balance sheet reduction raises questions about whether he will deliver the rate cuts the Trump administration has been pushing for. A hawkish tilt complicates the rate cut expectations underpinning gold's recovery this week; a dovish one raises material questions about Fed independence. UK and Japan inflation prints later this week will meanwhile provide early evidence of how the energy supply shock has cascaded to broader consumer prices — and whether it further complicates the path to easing.

The next technical breakout trigger

Spot gold maintains its medium-term bullish bias, trading comfortably above its 200-day moving average (MA). While the 17% rebound from the $4,099 trough has reclaimed the 20-day MA, momentum has paused as gold consolidates within a narrow $4,737–$4,887 range.

A decisive close above the 50-day MA ($4,870) would signal a short-term breakout, clearing the path for a retest of the $5,044 horizontal resistance. Beyond that, the primary descending trendline (connecting the $5,596 and $5,420 peaks) remains the ultimate structural barrier. A breach of this trendline would be required to officially end the corrective phase and open the door for a return to all-time highs.

Spot gold daily price chart

The figures stated in this article are as of 21 April 2026 unless otherwise stated. Past performance is not a reliable indicator of future performance.