Gold (XAU/USD) gave up part of Thursday’s earlier rise as the US Dollar and Oil prices rebounded amid tensions around the Strait of Hormuz. It traded near $4,712 after reaching a two-week high of about $4,764.
Iran has introduced new rules for ships using the Strait of Hormuz, which carries 20% of global Oil flows. Reports say commercial vessels must co-ordinate transit with Iranian military authorities, with earlier coverage citing possible fees of about $2 million.
Middle East Talks And Shipping Rules
Tehran is reviewing a US-backed proposal linked to ending the war in the Middle East. US President Donald Trump said talks in the last 24 hours were “very good” and that a deal was “very possible”.
Federal Reserve officials have indicated no rush to cut rates. Boston Fed President Susan Collins said rates may need to stay on hold “for a longer period”, and said the odds of worse inflation have increased, with a rate hike also a possible scenario.
US data showed Initial Jobless Claims at 200K for the week ending May 2, up from 190K and below 205K forecast. ADP private payrolls rose 109K in April versus 61K in March and 99K expected, ahead of Friday’s NFP report.
Technically, gold is above the 200-day SMA near $4,307, but below the 100-day SMA around $4,774 and the 50-day SMA near $4,790. RSI is near 53 and ADX near 21, with resistance at $4,774, $4,790 and $4,850, and support at $4,500 and $4,307.
Volatility Strategies Ahead Of Nfp
The current market presents a classic standoff between geopolitics and monetary policy, pinning gold in a tight range. With tensions high in the Strait of Hormuz, the safe-haven appeal is obvious, yet the Federal Reserve’s firm stance on keeping rates high is a powerful headwind. This makes outright long or short positions through futures particularly risky in the immediate term.
We believe the smarter play is on volatility itself, especially with the Nonfarm Payrolls report due tomorrow. A significant beat or miss on the jobs number could easily break gold out of its current consolidation. Options strategies like a long straddle could capitalize on a sharp move in either direction, as current implied volatility on gold options sits near 18%, reflecting market anticipation.
The situation in the Strait of Hormuz is the primary catalyst for upside risk, as it controls about a fifth of the world’s daily oil supply. We saw a similar playbook during the Red Sea disruptions in late 2023 and early 2024, which led to a sustained elevation in shipping insurance and oil prices. Any actual disruption or imposition of transit fees by Iran would likely send gold soaring past the $4,850 resistance level.
On the other hand, the Fed’s hawkishness should not be underestimated, as officials are clearly concerned about re-igniting inflation. Looking back, we remember how persistent core inflation remained through much of 2024 and 2025, stubbornly staying above the 3% mark despite restrictive policy. A strong jobs report would reinforce the “higher-for-longer” narrative and could easily push gold down to test support at $4,500.
Given these opposing forces, we see opportunities in strategies that define risk. For those betting on continued gridlock until a clearer signal emerges, selling an iron condor with strikes outside the $4,500 to $4,850 range could be viable. However, the probability of a catalyst in the coming weeks suggests that preparing for a breakout, rather than continued sideways action, may be the more prudent approach.
