Gold Climbs on Iran Deal Hopes Before Giving It Back

Gold pushed higher again on Thursday, with spot prices reaching $4,828.68 per ounce by mid-session before giving up those gains and closing down by roughly $3 as markets digested a dense flow of market-moving news: a grim IMF growth downgrade, a major new research paper from the World Gold Council, and incremental signs that the United States and Iran may be edging toward a diplomatic off-ramp in a conflict that has rattled commodity markets since late February. The day's trading captures, in miniature, the conditions that have defined gold's extraordinary 2026 run: persistent macro anxiety, geopolitical whiplash, and an investor base that continues to treat every dip as an opportunity.

The geopolitical backdrop remains the dominant variable. The United States and Israel launched military operations against Iran on February 28, triggering Iran's closure of the Strait of Hormuz through which roughly 20 percent of the world's oil and liquefied natural gas supplies transit and setting off a shock that sent oil briefly above $100 per barrel. Crude has since retreated toward $95 on renewed hopes for a ceasefire extension; Trump told advisers Wednesday that he was open to ending the confrontation even if the Strait is not fully restored, and mediators have reportedly made progress on extending the current two-week ceasefire, according to the Associated Press. That diplomatic progress, combined with a dollar index near six-week lows, provided gold's tailwind Thursday. Even so, the metal remains roughly 10 percent below its January 28 record of $5,589.

The backdrop of deteriorating global fundamentals is putting a floor under gold despite the diplomatic softening. The IMF released its April 2026 World Economic Outlook on Tuesday, cutting its global growth forecast to 3.1 percent from a January estimate of 3.3 percent, and lifting its inflation projection to 4.4 percent. The Fund stated bluntly that it would likely have upgraded its growth estimate to 3.4 percent absent the conflict. In an adverse scenario in which energy market disruption extends into 2027 and inflation expectations become unanchored the IMF warned that global growth could drop to around 2 percent. Bloomberg reported today that the IMF separately slashed growth forecasts for Gulf oil states, with Iran's 2026 outlook revised down 7.2 percentage points to a contraction of 6.1 percent. The classic stagflationary cocktail of slower growth and faster inflation is, historically, among the most supportive environments for gold.

Against that backdrop, the World Gold Council published a closely watched research paper this morning titled "You Asked, We Answered: Has Gold's Performance Structurally Changed?" the most data-intensive defense of gold's strategic role published in this volatile cycle. The paper acknowledges directly that gold's price volatility in early 2026 surged to the top fifth percentile of data stretching back to 1971, a figure that has featured prominently in bearish commentary. But the WGC's key rebuttal is statistical: gold's volatility is historically mean-reverting, with a half-life of just 1.6 months. The paper also notes that despite heightened volatility, gold trading volumes during the late January selloff reached $965 billion per day the highest on record demonstrating that liquidity has remained intact. A separate portfolio analysis showed

that even a 5 percent allocation to gold continued to reduce overall portfolio risk in a standard 60/40 framework during the 2025-to-present period.

State Street's SPDR Gold Strategy team framed the first quarter in its April monthly monitor as "down but not out," maintaining a 50 percent base-case projection of $4,750 to $5,500 per ounce into year-end and describing gold as "in the middle innings of a bull cycle." The team's analysis identified the current Iran conflict as a "Grey Swan" a risk they had flagged as a possibility in January and noted that oil prices normalizing to $80 to $85 per barrel could quickly push gold back above $5,000. Crucially, some structural factors that supported gold's 2024-to-2025 run, including expanding fiscal deficits and sovereign debt burdens, have been exacerbated by the conflict itself. U.S. net interest payments on federal debt are projected to exceed $1 trillion this year for the first time, according to the Congressional Budget Office a figure State Street cited as a continued tailwind for gold's long-term case.

Today's initial jobless claims data release added another variable to an already crowded picture, with markets watching for any signs that the energy shock is beginning to filter through to U.S. labor markets. The Federal Reserve holds its next rate decision on April 29 the last meeting before Chair Jerome Powell's term expires and markets currently assign a 99.5 percent probability to rates remaining unchanged at 3.50 to 3.75 percent, according to CME Group. Any hint of dovishness from incoming Fed commentary, or uncertainty about Powell's successor, would likely provide a further bid for gold. For now, the metal is navigating a day dense with headline risk exactly as it has navigated the broader year: absorbing the cross-currents, and holding above $4,800. For those that would like more information about our services click here.

Wishing you as always good trading,