Gold (XAU/USD) trims earlier gains on Wednesday as traders remain cautious amid ongoing uncertainty around the US-Iran conflict, despite US President Donald Trump extending the ceasefire with Iran just hours before it was due to expire. At the time of writing, XAU/USD is trading around $4,735, holding above a one-week low of $4,668 touched on Tuesday.
Trump extends ceasefire but keeps naval blockade in place
The ceasefire extension comes after Iranian leaders rejected negotiations “under the shadow of threats” and refused to attend the second round of peace talks expected in Pakistan. Donald Trump said the decision was made at the request of Pakistan’s leadership to allow time for Iran to present a unified proposal for negotiations.
However, the US has not lifted the naval blockade of Iranian ports. “I have therefore directed our Military to continue the Blockade… and will extend the Ceasefire until such time as their proposal is submitted, and discussions are concluded, one way or the other,” Trump said in a Truth Social post.
Trump said talks with Iran could take place as soon as Friday, according to the New York Post, while Iran’s Tasnim News Agency reported that Tehran has not yet decided whether to hold discussions on that day.
The ceasefire has done little to bring clarity, with both sides still far from any meaningful settlement. Iran has not formally accepted the extension, and with the naval blockade still in place, it remains unclear whether Tehran will return to the negotiating table.
Gold struggles as higher-for-longer rate outlook persists
While not a lasting solution in the Middle East crisis, the extension of the ceasefire has calmed immediate fears and supported a modest recovery in bullion. Since the US-Iran war began, Gold has behaved more like a risk-sensitive asset, with price action largely driven by moves in the US Dollar (USD) and Oil prices.
At the same time, fading expectations of Federal Reserve (Fed) interest rate cuts amid rising inflation risks from higher energy costs continue to act as a headwind, limiting any meaningful recovery in the Gold price, with the metal still down nearly 10% since the onset of the war.
Oil prices remain elevated, showing little reaction to the ceasefire news, as supply through the Strait of Hormuz remains largely restricted. Recent US data highlight the impact of higher energy costs, with Retail Sales rising by 1.7% MoM in March after a 0.7% increase in February, while the Consumer Price Index (CPI) jumped 0.9% MoM, accelerating sharply from 0.3% previously.
This backdrop supports expectations that the Fed may delay rate cuts and keep borrowing costs higher for longer. Looking ahead, the US economic calendar is relatively light on Wednesday, leaving traders focused on geopolitical headlines for fresh direction.
Technical analysis: XAU/USD holds above key SMAs but lacks bullish conviction
In the daily chart, XAU/USD holds above the 100-day Simple Moving Average (SMA) at $4,731 and the 200-day SMA at $4,236, keeping the broader trend underpinned, but it remains capped beneath the 50-day SMA at $4,882, which limits immediate topside traction. The Relative Strength Index (RSI) at 48 sits near neutral territory, while the Moving Average Convergence Divergence (MACD) indicator is positive, together suggesting balanced momentum after the recent pullback.
On the topside, initial resistance comes at the 50-day SMA near $4,882; a clear break above this barrier would open the way for a more convincing recovery phase. On the downside, immediate support is located at the 100-day SMA around $4,731, with a deeper floor at the 200-day SMA near $4,237.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Editorial note: This recovered market brief has been cleaned and reclassified by Next Move Markets for educational market intelligence. It is not investment advice.
Next Move Markets desk view
For active traders, this brief should be read through the lens of precious metals rather than as a standalone headline. The key question is whether the theme behind Gold trades range-bound after bounce from weekly low as US-Iran uncertainty persists can influence positioning beyond the first reaction. That means watching real yields, dollar direction, inflation expectations and safe-haven demand together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether real yields and the dollar move together or send conflicting signals for gold.
- How traders react around prior swing highs, lows and liquidity zones.
- Whether safe-haven flows are broad-based or limited to a short headline reaction.
- ETF flow, futures positioning and inflation data that could validate or weaken the move.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from real yields, dollar direction, inflation expectations and safe-haven demand. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For precious metals, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Gold trades range-bound after bounce from weekly low as US-Iran uncertainty persists may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
