Gold approaches $4,800 as weaker Dollar and lower yields boost interest

Gold Prices Surge Amid Diplomatic Developments and Dollar Weakness

Gold (XAU/USD) continued its upward momentum on Thursday, propelled by comments from Israeli Prime Minister Benjamin Netanyahu expressing willingness to engage in talks with Lebanon. Combined with a broadly weaker US Dollar, these factors have supported gold’s rise, bringing it closer to the $4,800 mark.

Market Sentiment: Truce Prospects and Economic Data Pressure the Dollar

Netanyahu’s announcement of seeking direct negotiations with Beirut followed Israel’s largest offensive in Lebanon, which resulted in over 300 casualties. The focus of these discussions is expected to be on disarming Hezbollah and fostering peaceful relations between the two nations.

According to AFP, Lebanon is pushing for a ceasefire before entering talks with Israel. Meanwhile, the Strait of Hormuz remains mostly closed despite the initial phase of a two-week truce between the US and Iran. Only five ships, including one oil tanker, traversed the strait in the past day, a stark contrast to the pre-war daily average of 140 vessels.

Elsewhere, Pakistan is preparing to host the first round of discussions between the US and Iran in Islamabad.

These developments have contributed to a decline in oil prices, with WTI trading near $95.60, down 0.13% for the day. The US Dollar Index (DXY), which tracks the dollar against six major currencies, slipped 0.30% to 98.63 as the dollar weakened.

Gold’s rally has been further fueled by falling US Treasury yields, enhancing its appeal as a safe haven. The yield on the 10-year US Treasury dropped two basis points to 4.279%.

US Economic Indicators and Labor Market Update

Recent data revealed that US economic growth was slower than anticipated, with GDP expanding by just 0.5% year-over-year in the last quarter of 2025, below the 0.7% forecast. The Core Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve’s preferred inflation measure, eased from 3.1% to 3% year-over-year in February.

Despite an increase in Initial Jobless Claims to 219,000 last week—exceeding expectations and previous figures—Continuing Claims dropped to 1.794 million, their lowest since May 2024, indicating ongoing strength in the labor market.

Market participants’ outlook for Federal Reserve rate cuts remained steady, with money markets projecting 7.5 basis points of easing by year-end, according to Prime Market Terminal (PMT).

Federal Reserve Rate Cut Forecasts

Upcoming US Economic Reports

On Friday, attention will turn to the US Consumer Price Index (CPI) report for March, which is expected to show a notable increase, with the headline figure rising from 2.4% to 3.3%. Core CPI is projected to climb from 2.5% to 2.7%. Additionally, traders will monitor the University of Michigan Consumer Sentiment and inflation expectations releases.

Gold Technical Outlook: Recovery Pauses at $4,800, Bears Target 20-Day SMA

Although Gold formed a shooting star pattern on Wednesday, the precious metal is showing signs of a rebound. Buyers have yet to retake the next significant resistance at $4,857, the high from April 8. The Relative Strength Index (RSI) indicates increasing bullish momentum, having moved above the neutral 50 level.

If Gold manages to reclaim $4,800, traders may aim for $4,857, with the psychological $4,900 and then $5,000 as further upside targets.

Conversely, a drop below the 20-day Simple Moving Average at $4,690 could pave the way for a test of the 100-day SMA at $4,656. Below this, the April 2 daily low of $4,553 becomes the next support level.