A weaker dollar and expectations of easing tensions in the Middle East supported a rebound in gold prices.
2026-04-01 13:31:52
According to APP reports, spot gold prices rose slightly by about 0.48% on Wednesday, reaching around $4,697 per ounce, with an intraday high of around $4,712, a near two-week high, mainly due to direct support from a weaker dollar. COMEX gold futures also rose, with the April contract briefly climbing above $4,710.
In his latest commentary, Marex analyst Edward Meir noted that talk of the US potentially ending the conflict within two to three weeks, even without a full reopening of the Strait of Hormuz , significantly boosted the US stock market and drove a rebound in gold prices . However, he also emphasized that if inflation expectations rise again, interest rates could climb further, limiting the upside potential for gold prices . This view aligns closely with current market consensus: before the conflict, investors expected at least two Fed rate cuts this year, but the market has now almost completely ruled out any rate cuts this year.
In a recent analysis, strategist Christopher Wong stated that if geopolitical tensions ease further, market expectations for further monetary easing by the Federal Reserve could return. In this scenario, real yields are expected to decline, providing significant support for gold prices . He pointed out that the current real yield on 10-year TIPS remains above 2.0%, continuing to be the biggest headwind for gold prices . Coupled with the latest US CPI data being slightly higher than expected, the probability of the Federal Reserve maintaining a hawkish stance has increased significantly.
To clearly illustrate the comparison of current driving factors, the following table summarizes the differences in the impact of expectations of geopolitical easing and macroeconomic tightening pressures on gold prices :
At a deeper level, this round of gold price rebound is essentially a combination of technical correction and a recovery in risk appetite. After the outbreak of the conflict, driven by soaring oil prices and safe-haven demand, gold prices initially fell sharply from their highs. However, as signals emerged that the conflict would end within two to three weeks, market risk sentiment improved rapidly, and the decline in the US dollar index further amplified the attractiveness of commodity prices. Nevertheless, the Federal Reserve's policy path indicates that, given the inflationary pressures driven by energy prices, the window for easing has been significantly postponed, meaning that the holding cost of gold , a non-interest-bearing asset, remains high.
Looking ahead, if the situation in the Middle East continues to ease and no new geopolitical shocks occur, gold prices may fluctuate within the $4680-$4720 range in the short term, forming a bottom. However, for a return to $5000 or even a challenge to previous highs, a genuine recovery in expectations for a Fed rate cut or a significant decline in oil prices is necessary. Currently, the latter seems more difficult – international oil prices have recently surged to record highs, and the inflation transmission effect is still unfolding. Investors should pay attention to next week's US ADP employment data and subsequent inflation indicators as key indicators for judging the Fed's policy path.
Editor's Summary : Wednesday's modest rebound in gold prices highlighted the short-term dominance of the US dollar and geopolitical factors, but the macroeconomic headwinds from the high-yield environment and hawkish expectations from the Federal Reserve remain strong. The market has shifted from pre-war optimism to realistic caution; gold prices may maintain a volatile pattern in the short term, while the medium- to long-term trend will still depend on the balance between the evolution of geopolitical risks and the actual shift in monetary policy.
In his latest commentary, Marex analyst Edward Meir noted that talk of the US potentially ending the conflict within two to three weeks, even without a full reopening of the Strait of Hormuz , significantly boosted the US stock market and drove a rebound in gold prices . However, he also emphasized that if inflation expectations rise again, interest rates could climb further, limiting the upside potential for gold prices . This view aligns closely with current market consensus: before the conflict, investors expected at least two Fed rate cuts this year, but the market has now almost completely ruled out any rate cuts this year.
In a recent analysis, strategist Christopher Wong stated that if geopolitical tensions ease further, market expectations for further monetary easing by the Federal Reserve could return. In this scenario, real yields are expected to decline, providing significant support for gold prices . He pointed out that the current real yield on 10-year TIPS remains above 2.0%, continuing to be the biggest headwind for gold prices . Coupled with the latest US CPI data being slightly higher than expected, the probability of the Federal Reserve maintaining a hawkish stance has increased significantly.
To clearly illustrate the comparison of current driving factors, the following table summarizes the differences in the impact of expectations of geopolitical easing and macroeconomic tightening pressures on gold prices :
At a deeper level, this round of gold price rebound is essentially a combination of technical correction and a recovery in risk appetite. After the outbreak of the conflict, driven by soaring oil prices and safe-haven demand, gold prices initially fell sharply from their highs. However, as signals emerged that the conflict would end within two to three weeks, market risk sentiment improved rapidly, and the decline in the US dollar index further amplified the attractiveness of commodity prices. Nevertheless, the Federal Reserve's policy path indicates that, given the inflationary pressures driven by energy prices, the window for easing has been significantly postponed, meaning that the holding cost of gold , a non-interest-bearing asset, remains high.
Looking ahead, if the situation in the Middle East continues to ease and no new geopolitical shocks occur, gold prices may fluctuate within the $4680-$4720 range in the short term, forming a bottom. However, for a return to $5000 or even a challenge to previous highs, a genuine recovery in expectations for a Fed rate cut or a significant decline in oil prices is necessary. Currently, the latter seems more difficult – international oil prices have recently surged to record highs, and the inflation transmission effect is still unfolding. Investors should pay attention to next week's US ADP employment data and subsequent inflation indicators as key indicators for judging the Fed's policy path.
Editor's Summary : Wednesday's modest rebound in gold prices highlighted the short-term dominance of the US dollar and geopolitical factors, but the macroeconomic headwinds from the high-yield environment and hawkish expectations from the Federal Reserve remain strong. The market has shifted from pre-war optimism to realistic caution; gold prices may maintain a volatile pattern in the short term, while the medium- to long-term trend will still depend on the balance between the evolution of geopolitical risks and the actual shift in monetary policy.
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