Gold Trades Sideways as Middle East Risks and CPI Weigh on Sentiment

Gold (XAU/USD) is trading slightly lower around 4,722 in early Asian hours on Friday, as ongoing uncertainty about the shaky US–Iran ceasefire and Middle East tensions keeps the market cautious. The situation is still unstable, especially with the Strait of Hormuz remaining closed, which is an important passage for global oil shipments.

According to a Bloomberg report, Benjamin Netanyahu is trying to engage directly with Beirut after a major outbreak of violence in Lebanon that caused over 300 casualties. These events raise questions about how long the ceasefire can hold. At the same time, Iran’s continued blockade of Hormuz is disrupting energy flows, adding more strain to global supply chains.

The sharp increase in oil prices is fueling concerns about inflation, which makes near-term interest rate cuts less likely. This is limiting gold’s upside potential because higher rates tend to reduce demand for assets like gold that don’t pay interest. While gold usually benefits during geopolitical unrest, the current higher yields act as a counterbalance.

Investors are now focused on the US Consumer Price Index data for March, due later today. Forecasts predict inflation may rise to 3.3% year-over-year from 2.4%, mostly driven by higher energy prices. If inflation turns out lower than expected, that might weaken the US Dollar and give gold some short-term support.

In terms of technical analysis, gold is still trading within a defined range on the 4-hour chart. Prices remain capped below resistance around 4,800 but hold above support near 4,600, with a mild bullish pattern as higher lows are forming.

The 4,760 to 4,800 area is a strong supply zone, where prices have repeatedly faced selling pressure. A confirmed break above 4,800 could push gold toward 4,880 and possibly 4,950. On the downside, if it falls below 4,600, that might trigger a drop toward 4,400 and even 4,150.

Momentum is weak, with the MACD flattening near neutral, showing no clear directional strength. Until a breakout happens, the market favors a range-bound approach—buying near support and selling near resistance.

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