Gold prices traded in a narrow range on Friday during the Asian session, hovering between $4,640 and $4,650, as investors weighed mixed signals from inflation data, Federal Reserve policy, and geopolitical developments. The precious metal struggled to break out as bulls and bears found equal reasons to hesitate.
On the geopolitical front, President Trump's decision to sustain the Iranian port blockade and reports of possible additional strikes on Iran kept tensions in the Gulf elevated. These factors supported gold's safe-haven appeal, encouraging bullish positions. However, the same tensions also boosted the U.S. dollar, as the greenback strengthened on safe-haven flows, making gold more expensive for holders of other currencies and capping its upside.
Further complicating the outlook, the Federal Reserve's latest FOMC meeting ended with an 8-4 vote to hold interest rates steady—the highest level of dissent in over three decades. This split signaled that the current hawkish stance may not persist, and rate cuts could be on the horizon, which would typically be positive for non-yielding gold. Yet, the immediate impact was muted as traders digested the implications.
U.S. economic data added to the confusion. The PCE index rose 0.7% month-over-month in March and 3.5% year-over-year, accelerating from February's 2.8% annual gain. This sticky inflation suggests the Fed may need to maintain higher rates for longer, conflicting with the dovish dissent. At the same time, the U.S. economy expanded at an annualized 2% in Q1 2026, down from a 0.5% contraction in Q4 2025, indicating resilience but also complicating the inflation narrative.
These conflicting fundamentals have left gold traders unable to take definitive positions, resulting in tight range-bound trading. The uncertainty is likely to persist until clearer signals emerge from economic data or Fed policy guidance.
Market participants, including companies like Collective Mining Ltd. (NYSE American: CNL) (TSX: CNL), are closely monitoring these developments to gauge where bullion prices may head in the coming weeks. The precious metal's direction will hinge on whether inflation pressures or geopolitical risks dominate, and how the Fed responds to the evolving landscape.
