Gold outlook shifts as Iran conflict and central bank decisions shape market trends

The war’s complicated impact on gold

A common assumption is that war always drives gold prices higher, yet recent events have upended this belief. When military operations against Iran began, gold actually fell by about 24%, briefly touching $4,100 before recovering and then settling below the $4,800 threshold. Despite the conventional expectation that gold thrives during international crises, the decline this March and April of 2026 has several fundamental and technical explanations—making the outcome less surprising to market observers.

Gold had already seen sharp gains in January and February as tensions mounted and the risk of war grew. By the time conflict erupted, many major investors seized the opportunity to realize profits, selling their holdings to generate liquidity. The absence of fresh buyers and profit-taking from established investors led to a pullback in prices following their earlier surge.

The conflict has not only affected gold; it has shaken equity and energy markets as well. Investors who suffered losses in other asset classes—including stocks, cryptocurrencies, and derivatives—found themselves relying on their gold profits to shore up liquidity needs, further exacerbating selling pressure on the yellow metal.

Another factor pressing on gold is the surge in energy prices, which threatens to accelerate inflation. If higher inflation prompts the U.S. Federal Reserve to postpone anticipated rate cuts—or even raise rates this year—gold could face further headwinds. Historically, higher interest rates dampen gold prices. Previous long-term strength in gold was partly attributed to the Fed’s adoption of quantitative easing (QE) and expectations of further monetary expansion under its new chair, but the current market context looks substantially different.

This uncertainty is compounded by expectations for Friday’s U.S. inflation data, with some analysts predicting headline inflation could increase by more than 1% month-on-month.

If a ceasefire is achieved by the Wednesday deadline, it could reduce the odds of rate hikes from the Fed or the European Central Bank—potentially providing gold with a tailwind. However, ECB officials have stated that a rate increase might be their next policy move, and in the U.S., robust labor markets support the view that further tightening could still be warranted.

Analysts’ forecasts and technical views on gold

Analysts are divided on gold’s next move. The pseudonymous HedgehogTrader compares gold’s current setup to the recent optimism in cryptocurrencies. Noting that gold miners (as measured by $GDXJ) are starting to outperform the gold price ($GLD), he argues the recent correction has run its course.

“The correction phase appears to be over (especially with $BPGDM dropping to 3/100). While investors are in shock and remain skeptical, a new upward trend may be about to start,” HedgehogTrader noted.

Other experts are even more bullish: Rashad Hajiyev targets $7,500 for gold and $300 for silver. In contrast, Jami draws a parallel to the 1979 Iran crisis, observing that although oil prices doubled back then, gold suffered a sharp correction—a scenario he expects could repeat now.

Technical analysis from GoldPredictors suggests gold may soon break out of the symmetrical triangle pattern it’s been trading within. As of publication, gold is not far from its short-term resistance zone, and the analyst believes that a break above $4,760—its most recent test—could accelerate further gains.

Trading interest in gold remains exceptionally strong. Last year, daily average trading volume in gold reached approximately $361 billion, nearly triple the $134 billion average in 2021. Gold now eclipses many other major global assets, including $186 billion in U.S. Treasury Bonds, $169 billion in the EUR/GBP currency pair, and about $100 billion traded on the Dow Jones Industrial Average.

Emphasizing this heightened activity, TKL highlighted that historical levels aren’t being set solely by prices but also by the robust investor engagement around the globe.

Yet, as Kar4nHQ, another analyst, observed, the overarching theme in these unprecedented volumes is “growing uncertainty.” When the Wednesday deadline passes, markets will soon reveal which direction gold’s price and trading activity will take next.