Ceasefire uncertainty and warm CPI keep buyers at around $4,750

Gold hovered around $4,750 an ounce over the weekend, and this morning’s inflation numbers gave buyers no reason to turn away.

March CPI came in at 3.3% year-on-year, the biggest monthly jump since 2022. Most of it was energy. Gas crossed $4 a gallon last month, and it went straight into the headline numbers. Core inflation, which strips out food and energy, softened slightly more than expected at 2.6% annually. For gold investors, it is the headline number that matters and the 3.3% inflation that keeps the trade alive.

where does gold stand now

Gold has risen for three consecutive weeks after falling sharply when the Iran war began in late February. In a worst-case scenario, as oil rallied and traders began raising prices, the metal fell more than 13% from its all-time high above $5,500. That’s a tough stretch for any property.

The ceasefire announced on Wednesday broadly provided some relief to the markets, which actually pulled gold down from its recent highs as money flowed back into equities. But the Strait of Hormuz is still not completely open. The ships are still not sailing as usual, and weekend diplomatic talks in Islamabad between U.S. Vice President J.D. Vance and Iranian officials could go either way. Until there is a real solution to the strait, the geopolitical floor under the gold remains in place.

Central banks are not backing down

One thing that hasn’t changed despite all the volatility is central bank demands. According to the World Gold Council, there were net inflows of 21 tonnes into global gold ETFs in the first few days of April alone. What is notable is that the buying occurred when markets were actually calming down, not during heightened panic. Demand that builds during calm periods is more durable than fear-induced buying that reverses after a change in sentiment.

The broader trend goes back even further. Central banks have been aggressively increasing gold reserves for years, with the US dollar’s share of global FX reserves falling to its lowest level since 1994, while gold’s share has reached its highest level since 1991. This is not a short-term business; This is a structural change in how reserve managers are thinking about their portfolios.

what the banks are saying

JPMorgan has set a year-end price target of $5,000 an ounce, with some analysts predicting $6,000 in the long term. Their outlook is based on a continued strong central bank and investor demand of around 585 tonnes per quarter in 2026.

Goldman Sachs focuses on the Strait of Hormuz. His outlook is simple: If the Straits remain closed another month, Brent crude remains above $100, inflation remains high, and that is the environment in which gold performs. As long as the ceasefire remains fragile, they see increased risk to their oil price forecasts.

silver is also increasing

Gold isn’t the only metal worth looking at. This week, silver is also trading with gains around $ 75.89 an ounce. Silver moves faster than gold in both directions as it leverages its safe-haven assets as well as industrial demand. The gold-silver ratio is currently around 63:1, which some precious metals investors see as an indication of the relative value between the two.

fade factor

The Fed is not cutting rates in April, that much is certain. Markets are pricing in about a 45% chance of at least one cut before the end of the year, but that number is almost entirely tied to energy prices over the next few months. If the ceasefire holds, the strait reopens, and oil returns, inflation calms and the prospects for a rate cut improve. This scenario will create some short-term headwinds for gold but will be broadly positive for equities and risk assets.

If talks break down over the weekend and conflict flares up again, oil prices will rise, inflation will remain stable and the Fed will remain on hold. That environment could see renewed interest in gold purchases, especially from investors looking for something that will hold value while everything else is falling into price again.

Either way, it won’t be a quiet few weeks for sleep. The variables are real and they are moving fast.