Inflation Concerns Keep Gold Trading in a Tight Range

Gold bulls were hesitant to enter large positions as market fundamentals offered mixed signals on Friday during the Asian trading session. Of particular concern was data revealing sticky inflation and the risk to economic growth resulting from elevated oil prices on global markets.

The precious metal was trading in the $4,640–$4,650 range as traders felt reluctant to make strong moves in either direction due to the uncertain bigger picture.

On the one hand, Trump’s decision to sustain the Iranian port blockade in a bid to pressure Tehran into agreeing to address Washington’s concerns about its nuclear program removed any suggestion that the geopolitical tensions in the Gulf would ease quickly. This was strengthened by reports that the U.S. president would be briefed about possible additional strikes on Iran to force its hand in the stalled talks.

These geopolitical cues made a case for gold making further gains in commodity markets and kept bulls active.

This thinking was given an additional boost by the highest level of dissent within the Fed in more than three decades when the FOMC meeting ended with a decision to hold interest rates at the current level. The 8-4 vote suggested that the current hawkish stand wouldn’t last for long and the Fed would soon cut benchmark lending rates, a positive signal to non-yielding bullion.

However, the rhetoric surrounding the Gulf conflict and its likelihood of escalation boosted the USD’s appeal as a reserve currency and the Greenback appreciated noticeably. These gains in the U.S. dollar index caused gold to be more expensive for holders of other currencies, and that put pressure on the potential upside of the commodity.

U.S. economic data releases also added to the cloud hovering over bullion. The PCE index edged up by 0.7% Month-on-Month in March, and the YoY figure reflected an increase of 3.5%. February’s YoY data showed an increase by 2.8%, indicating that inflation was accelerating. Traders were trying to understand how this rising inflation relates to data indicating that the U.S. economy exhibited resilience and expanded at an annualized 2% rate in Q1 of 2026, yet the previous quarter (Q4 of 2025) saw a 0.5% expansion rate.

These mixed signals are making it hard for gold traders to take definitive positions during trading, and that is contributing to the tight range-bound trading being observed as the week ended. You can be sure that Collective Mining Ltd. (NYSE American: CNL) (TSX: CNL) and other interested parties will be studying market fundamentals to get insights into where bullion could be headed in the coming weeks.

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