Gold rises for three consecutive weeks! Ceasefire agreement on shaky ground, analysts warn of uncertainties before the $5,000 mark

Gold market has extended its rally for a third consecutive week. Although market sentiment has improved, analysts say that gold is still "standing on the edge of a barrel of oil,” with price action caught in a delicate and fragile balance.

With the United States and Iran reaching a two-week ceasefire agreement on Tuesday, optimism has returned to the gold market. After the ceasefire news broke, gold briefly surpassed $4,800, but this uptick was short-lived. On Friday (April 10), spot gold settled at $4,748.39 per ounce, up $72.03 from last Friday, or 1.54%.

(Image source:FX168)

Analysts point out that although gold’s technical outlook has improved, the market still faces significant uncertainty, which could keep the price below $5,000 next week.

Tastylive Futures and Forex Head of Strategy Christopher Vecchio said in an interview with Kitco News that the ceasefire remains very fragile, and it is too early to tell if it will lead to a lasting peace agreement.

He said, “In the presence of such persistent background noise, it is hard for me to be particularly enthusiastic about gold. The gold market needs the situation to ultimately result in a concrete agreement, or we'll likely see another round of funding unwinds, which would pressure gold prices downward again.”

Vecchio said he remained bullish on gold’s long-term prospects, but didn’t see many short-term trading opportunities.

“With all this ongoing noise, I haven’t seen enough reasons to touch gold or silver right now,” he said.

Saxo Bank Head of Commodities Strategy Ole Hansen also said he is cautious on gold, although he is somewhat reassured by the recent rebound in gold prices and improved ETF demand.

He added, “What we need is a certain degree of certainty, a clear sign that the war in the Middle East is nearing its end. Only then will the recent bullish drivers for gold regain dominance. Moreover, if the economic aftermath prompts the Federal Reserve to consider rate cuts, these bullish drivers could become even stronger.”

Analysts note that in the short term, inflation concerns remain the core factor driving the gold market.

Data released Friday by the US Bureau of Labor Statistics showed that the March Consumer Price Index (CPI) rose 0.9% month-on-month, significantly higher than February’s 0.3% increase.

Although inflation clearly picked up, the increase was still slightly below market expectations. Previously, economists generally expected March’s CPI to rise 1.0% month-on-month. On a year-over-year basis, headline inflation climbed 3.3%, matching market forecasts.

Despite gasoline price surges putting pressure on consumers due to supply chain disruptions caused by the Iran war, the data also indicates that inflation has yet to take root more broadly across the economy.

Excluding the volatile food and energy sectors, March’s core CPI increased by just 0.2% month-on-month; year-on-year, core inflation rose 2.6%, up from February’s 2.5%.

On the other hand, another disappointing data point came from the University of Michigan. Its preliminary consumer confidence survey showed a sharp drop in market optimism, while inflation expectations rose noticeably.

BCA Research Chief Commodity Strategist Roukaya Ibrahim told Kitco News recently that, from a tactical perspective, she remains cautious on gold in the short-term as the market currently expects inflation risks to drive up rate expectations.

However, she also pointed out that once these inflation worries start to further suppress economic growth, gold will become an attractive safe haven asset once again.

She stated, “Current geopolitical risks are essentially manifesting first as an inflation shock. This will cause investors to raise rate hike expectations, or at least temper hopes for rate cuts. But over time, this shock will gradually turn into a growth shock, which will bring yields down.”

Although the market generally expects the Federal Reserve to maintain a neutral stance at least until this summer, TD Securities analysts said they still believe there is a path to rate cuts in the second half of this year.

TD Securities wrote in a report: “We expect the Federal Reserve to remain patient as the ultimate impact of the Middle East conflict on the US economy has not yet been fully digested. As inflation gradually returns to normal, we still see room for two 25-basis-point cuts in the second half of 2026.”

Analysts stated that once the market realizes the Federal Reserve will prioritize economic growth over inflation, gold prices will again attract fresh bullish momentum.