What's Next for Gold? Geopolitics, the Fed, and the $5,044 Breakout Level to Watch
Author: Fabien Yip, Market Analyst, IG
Publication Date: April 21, 2026
Current Market Overview
Gold is currently trading around US$4,800/oz, experiencing a slight pullback after a 2% increase the previous week. This recovery is attributed to easing tensions in the Strait of Hormuz, which has alleviated inflation concerns and reignited expectations for potential rate cuts by the Federal Reserve (Fed). Additionally, a decline in the US Dollar Index (DXY) by 0.56% has provided further support for gold prices.
Market Performance Comparison
Despite the recent recovery, gold prices remain approximately 9% below their pre-war levels from February 27, while the S&P 500 has rebounded to trade 3% above that baseline. Key indicators show a rebound in futures longs, increased ETF inflows, and a rise in bullish options trading. Notably, ETF inflows have turned positive for three consecutive weeks, with a total of 21.7 tonnes added in the week ending April 17, 2026, bringing the year-to-date net inflow to 117.4 tonnes. However, this is still below the 89.6 tonnes of outflows recorded in March.
Central Bank Demand Insights
The trend of central bank net buying remains strong, with February data indicating net purchases of 27 tonnes. In March, Poland, China, and Uzbekistan made significant purchases, but these were overshadowed by Turkey's 118-tonne drawdown, which was primarily a response to defend the lira amid rising energy costs. This suggests that Turkey's actions were more about immediate financial needs rather than a strategic shift away from gold.
Geopolitical Influences
The ongoing US-Iran negotiations are a critical factor influencing gold prices. The current ceasefire is set to expire soon, and the outcome of these talks could significantly impact gold's appeal as a non-yielding asset. Additionally, the Senate confirmation hearing for Fed Chair nominee Kevin Warsh introduces uncertainty regarding future rate cuts, which could complicate gold's recovery trajectory.
Technical Analysis and Future Outlook
Gold maintains a medium-term bullish outlook, trading above its 200-day moving average. The recent rebound from a low of $4,099 has seen gold consolidate within a range of $4,737–$4,887. A decisive close above the 50-day moving average at $4,870 could trigger a breakout towards the $5,044 resistance level. A breach of the primary descending trendline connecting previous peaks would signal a potential return to all-time highs.
Conclusion
As geopolitical tensions and central bank policies continue to shape the gold market, traders should closely monitor these developments and technical indicators to navigate potential price movements effectively.