Gold rose on Thursday as comments from Israel’s Prime Minister Benjamin Netanyahu about talks with Lebanon, plus a weaker US Dollar, supported demand. Prices moved up towards the $4,800 level.
Netanyahu said he wants direct talks with Beirut, a day after an Israeli attack in Lebanon killed more than 300 people. He said talks would focus on disarming Hezbollah and establishing peaceful relations.
Middle East Talks And Shipping Risks
AFP reported that Lebanon wants a ceasefire before any talks. The Strait of Hormuz stayed largely shut during the first 24 hours of a US-Iran two-week truce, with 5 vessels passing through versus about 140 per day before the war.
WTI traded near $95.60, down 0.13%, while the US Dollar Index fell 0.30% to 98.63. The US 10-year yield slipped 2 basis points to 4.279%.
US GDP rose 0.5% year-on-year in the last quarter of 2025 versus expectations below 0.7%. Core PCE inflation eased from 3.1% to 3% year-on-year, while Initial Jobless Claims rose to 219K and Continuing Claims fell to 1.794 million.
Markets priced 7.5 basis points of rate cuts by year-end. Friday’s CPI is forecast at 3.3% headline (from 2.4%) and 2.7% core (from 2.5%), alongside Michigan sentiment data.
Gold Outlook And Positioning
We saw hopes for Middle East de-escalation a few months ago with potential Israel-Lebanon talks and a US-Iran truce. However, the situation remains tense, as the Strait of Hormuz is still operating at a fraction of its normal capacity of over 90 tankers a day. This continued uncertainty provides a strong underlying reason for holding gold.
The economic weakness we saw in late 2025, with just 0.5% GDP growth, has persisted into the first quarter of 2026. As was expected, the March CPI report came in hot, and inflation remains stubbornly above the Fed’s 2% target, with the latest figures still hovering near 2.8%. This environment of slow growth and sticky inflation increases the appeal of gold as a store of value.
Because of this persistent weakness, traders are now pricing in at least 50 basis points of Fed rate cuts by the end of the year, a significant shift from the mere 7.5 points expected a couple of months ago. This has kept pressure on US Treasury yields, with the 10-year yield now trading closer to 4.15%. A weaker dollar and lower yields are classic tailwinds for bullion.
This environment of high uncertainty and potential for sharp price moves makes options attractive. We believe traders should consider buying call options or implementing bull call spreads to target a move toward the $5,000 psychological level. This defines your risk while maintaining exposure to the upside if geopolitical or economic news pushes gold higher.
For those trading futures, the technical levels mentioned previously remain critical. A sustained break above the $4,857 resistance opens the door for a quick run higher. However, we must watch the 20-day moving average, now around $4,750, as a key level of support; a break below it could signal a sharp, short-term correction.
