Gold prices climbed around 4% over the week, despite falling roughly 1.7% on Friday. The metal rose along with global indices on the week, even as oil prices continued to climb into the long weekend. Should Brent oil remain above $110 or accelerate, then gold prices could come under renewed pressure in the week ahead.
What’s the latest situation and implications on gold outlook?
Over the weekend, the war continued as the conflict dragged into its sixth week. Donald Trump ramped up the rhetoric, warning Iran it had just 48 hours to “make a deal” or reopen the Strait of Hormuz — otherwise, in his words, “all hell will rain down on them.” Posting on Truth Social, the US President doubled down on an earlier ultimatum, signalling that patience in Washington is wearing thin. The warning expires at just after 10:00 AM ET on Monday, April 6th, which would be about half an hour after the US stock market reopens after the 3-day weekend. Coincident? I doubt it.
With energy markets pushing higher into Friday’s close, there’s little indication that Iran is prepared to step back — or that the strategically critical Strait of Hormuz will reopen anytime soon. This should keep risk appetite low, undermining stocks and holding the positively-correlating gold back. The precious metal could gap lower or head lower on Monday, barring a surprise de-escalation in the conflict.
Gold fundamental outlook
As mentioned, the situation on the ground appears to be deteriorating. The US is still conducting search-and-rescue operations for a crew member from an F-15E fighter jet shot down by Iran on Friday. Meanwhile, Tehran has continued its strikes across Gulf Arab states and Israel, keeping regional tensions firmly on edge.
While this means heightened haven demand, the recent gains for the dollar and bond yields means even gold could be hurt during times like now. The metal, therefore, appears to be on a far less stable footing, compared to earlier this year. The sharp sell-off in March reflected a broader repricing of expectations as the Iran conflict pushed oil above $100, fuelling inflation concerns and lifting both the US dollar and bond yields. That combination has proven toxic for gold, as the prospect of renewed central bank tightening has outweighed traditional safe-haven demand.
Looking ahead, the fundamental outlook hinges heavily on how the Middle East situation evolves. A de-escalation that brings oil prices lower could ease inflation fears and, in turn, reduce pressure on central banks to keep policy restrictive—something that would likely support gold. However, if tensions persist and energy prices remain elevated, the risk of prolonged higher rates could continue to cap upside.
That said, downside risks may still be somewhat contained. Inflation uncertainty and geopolitical fragility should keep a floor under demand, particularly from investors seeking protection against currency debasement. Meanwhile, central bank buying remains a key structural pillar, even if purchases have eased slightly in the short term.
Read our full 2026 Q2 gold outlook.
Gold technical analysis
Gold bounced quite sharply off earlier lows, managing to close above the $4,660 level, which it had been oscillating around in the final days of last week.
This level will be the first area of support to watch when markets reopen on Monday. Below that, $4,580 serves as interim support on XAUUSD, followed by $4,500 as the next key level.
However, the most important level for me remains $4,400, which marked the lows from early February. That level was briefly taken out during the sharp sell-off at the end of March, but we’ve since reclaimed it and seen a strong recovery.
Prices rallied from those lows to around the $4,800 area before easing slightly into Friday’s close.
As it stands, $4,800 is now acting as immediate resistance. Above that, $4,900 is the next level to watch, while the key resistance sits at the psychologically important $5,000 level — the point where the sell-off began on March 18.
So, to summarise:
- Resistance levels: $4,800 → $4,900 → $5,000
- Support levels: $4,660 → $4,580 → $4,500 → $4,400
A break below $4,400 could open the door for a move back toward the March lows, just below $4,100. Beyond that, the next major downside target would be the $4,000 psychological level.
Overall, the gold outlook looks increasingly tied to geopolitics and inflation rather than momentum alone.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
