Gold prices struggle to survive: Iranian artillery fire remains silent, Fed signals are inconsistent, and bulls and bears battle fiercely around the $4600 level.
2026-05-01 14:09:57
The international gold market saw a slight decline during Asian trading hours on Friday (May 1st), failing to continue the slight gains of the previous trading day. Spot gold is currently trading around $4605 per ounce, down approximately 0.36%. Despite the slightly weak price movement, gold remains firmly above the key psychological level of $4600 per ounce. Looking at the overall performance for the week, gold prices are highly likely to record their second consecutive week of decline, indicating a cautious market sentiment recently.
The immediate reason for the short-term pressure on gold prices was a slight rebound in the US dollar index. The previous trading day, due to a sudden escalation of geopolitical risks, the dollar had fallen to its lowest point in a week and a half. However, as negotiations between the US and Iran regarding the nuclear issue and naval blockade stalled, the dollar quickly gained favor among safe-haven funds, thus putting downward pressure on dollar-denominated gold. At the same time, the latest monetary policy signals from the Federal Reserve presented a complex picture. On the one hand, the official stance was to maintain interest rates unchanged; on the other hand, internal dissent was increasing, and economic data was strong, further reinforcing market expectations that the Fed would maintain high interest rates for a longer period. For non-interest-bearing gold assets, this macroeconomic environment clearly limited its upside potential.
Recent developments in the Middle East have become a key variable influencing the price movements of gold and the US dollar. It is reported that US President Donald Trump has formally rejected Iran's proposal to open the Strait of Hormuz and lift the existing maritime blockade, while also postponing bilateral nuclear negotiations to a later stage.
Trump further stated that the United States will continue its maritime blockade of Iran unless the Iranian regime reaches a new agreement that can fully alleviate U.S. concerns about its nuclear program.
More seriously, media reports indicate that the US government is actively considering a new round of military strikes against specific targets within Iran. This series of tough statements and potential actions poses a real risk of further escalation in tensions between the US and Iran.
Against the backdrop of a sudden increase in geopolitical uncertainty, the safe-haven function of the US dollar as the world's primary reserve currency has become more prominent, attracting some funds from non-interest-bearing assets such as gold to the dollar, which in turn puts downward pressure on gold prices.
From a monetary policy perspective, the Federal Reserve decided at its policy meeting that concluded this Wednesday to maintain its key policy rate at the 3.50% to 3.75% range. However, beneath this seemingly stable decision lay underlying tensions: the largest number of dissenting votes since 1992 occurred, with as many as three policymakers expressing disagreement with the dovish wording of the policy statement. This internal division sends a signal to the market that the Fed has not fully shifted to a dovish stance.
A series of U.S. macroeconomic data released on Thursday further reinforced the rationale for maintaining a tight monetary policy. A report from the U.S. Bureau of Economic Analysis showed that the personal consumption expenditures (PCE) price index rose 0.7% month-over-month in March, with the year-over-year growth rate accelerating to 3.5% from 2.8% in February. Excluding volatile food and energy prices, the core PCE price index rose 3.2% year-over-year, higher than the 3.0% in the previous month.
Meanwhile, preliminary GDP estimates indicate that the US economy grew at an annualized rate of 2.0% in the first quarter of 2026, a significant rebound from the revised growth rate of only 0.5% in the fourth quarter of 2025. The combination of accelerating inflation and economic resilience has led to widespread market expectations that the Federal Reserve will likely maintain current interest rates for most of next year. This expectation undoubtedly provides support for the US dollar and weakens the appeal of gold.
However, market sentiment is not entirely hawkish. According to pricing in the interest rate futures market, the probability of the Federal Reserve cutting rates by at least one 25 basis point in 2026 has jumped from only 1.3% the previous day to over 15%.
This change indicates that some traders are still positioning themselves in advance for a future policy shift. It is precisely this expectation of interest rate cuts that has curbed the willingness of dollar bulls to make large-scale aggressive bets, thus objectively helping gold prices avoid a more significant decline and allowing gold to barely hold the $4,600 mark.
From a technical analysis perspective, gold prices briefly broke through the resistance of $4,600 and the 100-hour simple moving average during overnight trading, triggering some short covering and driving a brief rebound. However, the upward momentum quickly encountered resistance near $4,650, a level close to the 38.2% Fibonacci retracement level from the April high (i.e., $4,651.19).
Current technical indicators present a rather complex signal: the Relative Strength Index (RSI) is at 58.33, indicating that market momentum is solid but has not yet entered the overbought zone, while the Moving Average Convergence Divergence (MAD) indicator is still slightly in the negative range.
Overall, momentum indicators suggest that although gold prices are currently holding above the short-term uptrend line, bullish attempts still carry a distinctly cautious tinge.
Therefore, rational investors should remain patient until gold prices clearly break through the 38.2% Fibonacci retracement level, and should not rashly bet on the continuation of the mild rebound that started this week from around $4,500 (also the one-month low of the previous trend). If subsequent buying power strengthens further, then the 50% Fibonacci retracement level (i.e., $4,696.20) is likely to become the next important upward resistance level.
On the downside, immediate support is first tested at the 23.6% Fibonacci retracement level (i.e., $4595.49). If the weakness continues and this area is broken, the lower end of the broader trading range—$4505.46—will become the next target for the bears.
Looking ahead, market focus will gradually shift to the important US macroeconomic data to be released at the beginning of the month.
The first to be released is the ISM Manufacturing Purchasing Managers' Index, due later this Friday. This indicator will provide the market with the latest clues about the vitality of the US real economy and may have an immediate impact on the dollar's performance and gold prices.
Meanwhile, any new developments surrounding the Middle East crisis—especially whether there will be a substantial military conflict or diplomatic breakthrough between the US and Iran—will continue to be a key variable influencing global risk aversion, thus affecting the flow of funds between the US dollar and gold, the two ends of this "seesaw." Investors need to remain highly vigilant, as any unexpected changes on either side could break the current stalemate in gold price fluctuations and trigger a new round of trend-driven market movements.
At 14:08 Beijing time, spot gold was trading at $4602.08 per ounce.
The immediate reason for the short-term pressure on gold prices was a slight rebound in the US dollar index. The previous trading day, due to a sudden escalation of geopolitical risks, the dollar had fallen to its lowest point in a week and a half. However, as negotiations between the US and Iran regarding the nuclear issue and naval blockade stalled, the dollar quickly gained favor among safe-haven funds, thus putting downward pressure on dollar-denominated gold. At the same time, the latest monetary policy signals from the Federal Reserve presented a complex picture. On the one hand, the official stance was to maintain interest rates unchanged; on the other hand, internal dissent was increasing, and economic data was strong, further reinforcing market expectations that the Fed would maintain high interest rates for a longer period. For non-interest-bearing gold assets, this macroeconomic environment clearly limited its upside potential.
Geopolitical tensions escalate: US-Iran standoff intensifies, safe-haven funds flow back to the US dollar.
Recent developments in the Middle East have become a key variable influencing the price movements of gold and the US dollar. It is reported that US President Donald Trump has formally rejected Iran's proposal to open the Strait of Hormuz and lift the existing maritime blockade, while also postponing bilateral nuclear negotiations to a later stage.
Trump further stated that the United States will continue its maritime blockade of Iran unless the Iranian regime reaches a new agreement that can fully alleviate U.S. concerns about its nuclear program.
More seriously, media reports indicate that the US government is actively considering a new round of military strikes against specific targets within Iran. This series of tough statements and potential actions poses a real risk of further escalation in tensions between the US and Iran.
Against the backdrop of a sudden increase in geopolitical uncertainty, the safe-haven function of the US dollar as the world's primary reserve currency has become more prominent, attracting some funds from non-interest-bearing assets such as gold to the dollar, which in turn puts downward pressure on gold prices.
The Fed's signals are complex: a hawkish tone coupled with expectations of rate cuts has left the market uncertain.
From a monetary policy perspective, the Federal Reserve decided at its policy meeting that concluded this Wednesday to maintain its key policy rate at the 3.50% to 3.75% range. However, beneath this seemingly stable decision lay underlying tensions: the largest number of dissenting votes since 1992 occurred, with as many as three policymakers expressing disagreement with the dovish wording of the policy statement. This internal division sends a signal to the market that the Fed has not fully shifted to a dovish stance.
A series of U.S. macroeconomic data released on Thursday further reinforced the rationale for maintaining a tight monetary policy. A report from the U.S. Bureau of Economic Analysis showed that the personal consumption expenditures (PCE) price index rose 0.7% month-over-month in March, with the year-over-year growth rate accelerating to 3.5% from 2.8% in February. Excluding volatile food and energy prices, the core PCE price index rose 3.2% year-over-year, higher than the 3.0% in the previous month.
Meanwhile, preliminary GDP estimates indicate that the US economy grew at an annualized rate of 2.0% in the first quarter of 2026, a significant rebound from the revised growth rate of only 0.5% in the fourth quarter of 2025. The combination of accelerating inflation and economic resilience has led to widespread market expectations that the Federal Reserve will likely maintain current interest rates for most of next year. This expectation undoubtedly provides support for the US dollar and weakens the appeal of gold.
However, market sentiment is not entirely hawkish. According to pricing in the interest rate futures market, the probability of the Federal Reserve cutting rates by at least one 25 basis point in 2026 has jumped from only 1.3% the previous day to over 15%.
This change indicates that some traders are still positioning themselves in advance for a future policy shift. It is precisely this expectation of interest rate cuts that has curbed the willingness of dollar bulls to make large-scale aggressive bets, thus objectively helping gold prices avoid a more significant decline and allowing gold to barely hold the $4,600 mark.
Technical Analysis: Short-term rebound encounters resistance; key levels will determine the future trend.
From a technical analysis perspective, gold prices briefly broke through the resistance of $4,600 and the 100-hour simple moving average during overnight trading, triggering some short covering and driving a brief rebound. However, the upward momentum quickly encountered resistance near $4,650, a level close to the 38.2% Fibonacci retracement level from the April high (i.e., $4,651.19).
Current technical indicators present a rather complex signal: the Relative Strength Index (RSI) is at 58.33, indicating that market momentum is solid but has not yet entered the overbought zone, while the Moving Average Convergence Divergence (MAD) indicator is still slightly in the negative range.
Overall, momentum indicators suggest that although gold prices are currently holding above the short-term uptrend line, bullish attempts still carry a distinctly cautious tinge.
Therefore, rational investors should remain patient until gold prices clearly break through the 38.2% Fibonacci retracement level, and should not rashly bet on the continuation of the mild rebound that started this week from around $4,500 (also the one-month low of the previous trend). If subsequent buying power strengthens further, then the 50% Fibonacci retracement level (i.e., $4,696.20) is likely to become the next important upward resistance level.
On the downside, immediate support is first tested at the 23.6% Fibonacci retracement level (i.e., $4595.49). If the weakness continues and this area is broken, the lower end of the broader trading range—$4505.46—will become the next target for the bears.
Market Outlook: Focus on US Economic Data and Evolution of the Middle East Situation
Looking ahead, market focus will gradually shift to the important US macroeconomic data to be released at the beginning of the month.
The first to be released is the ISM Manufacturing Purchasing Managers' Index, due later this Friday. This indicator will provide the market with the latest clues about the vitality of the US real economy and may have an immediate impact on the dollar's performance and gold prices.
Meanwhile, any new developments surrounding the Middle East crisis—especially whether there will be a substantial military conflict or diplomatic breakthrough between the US and Iran—will continue to be a key variable influencing global risk aversion, thus affecting the flow of funds between the US dollar and gold, the two ends of this "seesaw." Investors need to remain highly vigilant, as any unexpected changes on either side could break the current stalemate in gold price fluctuations and trigger a new round of trend-driven market movements.
At 14:08 Beijing time, spot gold was trading at $4602.08 per ounce.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
