On Wednesday, April 15, during the Asian session, spot gold briefly reached a nearly four-week high, before switching to consolidation and trading below the $4,850 mark, temporarily pausing its short-term uptrend. Despite some lack of momentum, the overall structure is still supported by two main factors: a weakening U.S. dollar and a renewed expectation of a rate cut from the U.S. Federal Reserve. With the interweaving of the geopolitical risk premium and a shift in the direction of monetary policy, the price of gold faces the need for technical correction; however, the bullish trend remains intact, and the market is waiting for a new catalyst to break out of the current consolidation phase.

【News Summary】

The main driver of the current gold rally was a sharp weakening of the U.S. dollar. Against the backdrop of rising expectations for improved U.S.-Iran relations, Vice President Vance proposed the initiative to “restart nuclear arrangements with Iran,” and UN Secretary-General Guterres made optimistic statements about the prospects for negotiations. Improved risk appetite among investors led the dollar to fall to a three-month low, providing strong support for gold.

At the same time, the “cooling” of inflation data further strengthened the outlook for gold’s growth. In year-on-year terms, March PPI in the U.S. came in at 4%, and at 0.5% month-on-month, both below expectations; core PPI remained at 3.8%. This fully dispelled fears of further tightening of policy by the Federal Reserve and led to a decline in U.S. Treasury yields. Since gold itself does not generate interest income, changes in rate expectations directly increased its relative attractiveness. Market analysts unanimously note that the main driver of gold prices is shifting from a pure “safe haven” scenario to a more interest-rate-sensitive trading scenario.

Nevertheless, gold price growth is not without obstacles. On the one hand, the dollar shows signs of stabilizing in the oversold zone, limiting further upside for gold; on the other hand, despite signs of de-escalation in the Middle East, Iran’s tough rhetoric in response to U.S. sanctions indicates that the ceasefire status could change at any moment, which may again bring demand for the dollar as a safe-haven asset. Right now, gold is in a period of “macroeconomic bullish factors amid short-term disagreements between ‘bulls’ and ‘bears’.”