An article explains the impact of the Middle East situation; gold prices in April may remain within this range
In the initial stage of conflict escalation, tough statements from both the US and Iran triggered market panic, with heightened safe-haven sentiment causing funds to flock into the gold market, directly supporting a strong international gold price. However, as the conflict persisted, concerns over energy supply pushed up oil prices, leading to elevated inflation expectations. Coupled with a fading outlook for Federal Reserve rate cuts, some central banks opted to sell off gold in exchange for liquidity, causing international gold prices to fall sharply.
The recent easing of tensions in the Middle East injected key momentum into the rebound of international gold prices in April. On April 8, East 8th Time Zone, Trump announced a two-week suspension of bombing Iran, and Iran agreed to a two-week negotiation. The ceasefire news triggered a ripple effect in the market: crude oil prices plunged, inflation expectations cooled, which in turn boosted expectations for Federal Reserve rate cuts, sending international gold prices above $4800/oz.
However, it is important to note that the core differences between the US and Iran have not been fundamentally resolved. Their stances on key topics such as the right of passage through the Strait of Hormuz and the nuclear issue remain far apart, and mutual trust is lacking; in the short term, the situation still faces risks of recurring tension. Beyond geopolitical variables, international gold prices in April are also constrained by multiple factors: continued global central bank gold purchases provide solid support for prices; in terms of Federal Reserve policy, the market is currently pricing in only one rate cut by the end of the year, and strong US nonfarm payroll data in March have reinforced the Fed’s hawkish bias, making it difficult for rate cut expectations to recover in the short term, thereby putting pressure on international gold prices.
Editor | Jiao Yang Layout | Jiao Yang Visuals | Zhang Zongwei
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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