Gold ended last week at $4,722.30 per ounce, shedding nearly 3% and snapping a four-week winning streak. The decline came despite escalating geopolitical tensions that would typically drive capital into the safe-haven asset. Instead, investors sold, and the metal closed Friday well below its 50-day moving average.
The disconnect is stark. While Brent crude surged almost 16% last week on supply fears, gold lagged badly. The Strait of Hormuz remains largely blocked since US-Israeli airstrikes on February 28 ignited a fresh conflict. Normally around 130 vessels transit the chokepoint daily; now just five are moving, a disruption that has rattled global trade. Yet gold, the traditional hedge against chaos, barely budged.
The Fed Factor Overwhelms Geopolitics
The Federal Reserve’s two-day policy meeting starting Tuesday is reshaping market positioning. A strengthening dollar is making gold more expensive for non-dollar buyers, while rising bond yields are eroding the appeal of the non-yielding metal. The market is pricing in a higher-for-longer interest rate scenario, precisely the environment that weighs on gold.
The geopolitical backdrop should be supportive. On April 25, President Trump abruptly canceled a trip by envoys Witkoff and Kushner to Pakistan, where exploratory talks with Iranian leadership were planned. Trump cited “enormous internal power struggles” in Iran. Iranian Foreign Minister Araghchi left Pakistan empty-handed, explicitly ruling out direct negotiations under pressure. Prediction markets now put the probability of a nuclear deal or peace agreement by end-April at under 4%.
But the oil-inflation linkage is overriding safe-haven logic. Expensive crude fuels inflation, which in turn keeps the Fed hawkish. That dynamic is currently suppressing gold, despite the obvious escalation risks.
Should investors sell immediately? Or is it worth buying Gold?
Technical Damage and Regulatory Headwinds
The chart has deteriorated. Gold slipped below its 100-day moving average, a bearish signal. If selling continues, the $4,600 zone offers initial support. On the upside, $4,870 represents a formidable barrier. From the January record high of $5,450, the metal is now roughly 13% lower.
The Relative Strength Index sits near 50, indicating neutral territory — the market is technically open in either direction. That leaves the next catalyst to the Fed’s decision Wednesday evening and Chairman Jerome Powell’s commentary on inflation expectations.
Adding a small but real drag, Revolut is discontinuing precious metals trading for customers in Bulgaria and eight other EEA countries. Affected investors have two months to liquidate positions, creating incremental selling pressure.
What Breaks the Stalemate
Gold’s year-to-date gain of nearly 9% remains respectable, but the metal has lost momentum since January’s peak. The key variable now is whether the Strait of Hormuz blockade persists and whether capital flows from oil hedges eventually shift into gold. For now, the market is watching Washington and Tehran more closely than any chart level. The next diplomatic move — or the next Fed signal — will likely determine whether gold finds its safe-haven footing or continues to defy its own historical playbook.
Ad
Gold Stock: Buy or Sell?! New Gold Analysis from April 26 delivers the answer:
The latest Gold figures speak for themselves: Urgent action needed for Gold investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from April 26.
Gold: Buy or sell? Read more here...