Gold’s Balancing Act: How a Fragile Iran Truce and Stubborn Core Inflation Forged a $4,569 Close

Gold rebounded from a two-month low of $4,370 to close the week at $4,569.90 per ounce, posting a daily gain of 1.57% after touching an intraday high of $4,596.60. The bounce was built on two competing forces: tentative diplomatic progress on an Iran ceasefire and a fresh batch of US inflation data that kept the Federal Reserve squarely in focus. The support zone around $4,381 held firm, providing the springboard for a rally that erased earlier losses.

The diplomatic push centered on a potential 60-day ceasefire between Washington and Tehran, with negotiators discussing a memorandum of understanding that would also reopen the Strait of Hormuz — a chokepoint for roughly a fifth of global oil flows. Iranian spokesman Baghaei cautioned that a final deal is still pending as nuclear talks continue, and the agreement remains subject to President Trump’s approval. Iran is seeking the release of frozen assets and toll-free passage through the strait, keeping geopolitical risk alive while simultaneously offering a reprieve that weighed on oil prices. Against this backdrop, the core PCE price index — the Fed’s preferred inflation gauge — rose 0.2% month-on-month in April and 3.3% from a year earlier, both figures landing exactly in line with expectations. The Chicago PMI for May surged to 62.7, far above the 50.5 forecast, reinforcing the narrative of a resilient economy. The 10-year Treasury yield eased to 4.44% on Thursday, but markets now price a 42-50% probability of another Fed rate hike by year-end, a persistent headwind for the non-yielding asset.

On the technical front, gold’s recovery from the $4,381 support zone — which preceded a brief dip to $4,370 — has set up clear upside targets. The 50-day moving average at $4,639 sits roughly 1.5% above current levels, followed by resistance up to $4,800. The 200-day average at $4,426 provided a floor during the week’s volatility. The RSI hovers near 50, signaling neutral momentum. Should the $4,381 level fail to hold, analysts warn of a potential slide to $4,094. Institutional positioning remains constructive: net long positions on COMEX rose by nearly 5,000 contracts to roughly 100,000. Major banks maintain bullish outlooks, with JPMorgan targeting $6,000 by year-end and Goldman Sachs forecasting $5,400 for late 2026. A separate weight came from India, where the government raised import duties on gold to 15%, causing physical bullion to trade at a discount to the global price.

Should investors sell immediately? Or is it worth buying Gold?

All eyes now turn to the US jobs report for May, due on Friday, June 5. Strong payroll numbers would further narrow the Fed’s room to cut rates, amplifying the headwinds for gold. The metal’s year-to-date gain stands at 5.87%, still about 16% below its January high of $5,450 — a gap that will take more than a ceasefire or a single inflation print to close.

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