Gold prices retreated sharply on Wednesday (April 15th) after hitting a one-month high of $4,871.28 per ounce, ultimately settling near $4,790 with a daily loss of nearly 1%. U.S. gold futures also declined, falling 0.5% to settle at $4,823.60. Within just 24 hours, gold's role shifted from safe-haven asset to a target for profit-taking, a reversal triggered by complex reactions to former President Trump's statement that the "Iran war is nearing its end." In early Asian trading on Thursday (April 16th), spot gold edged higher, currently trading around $4,820 per ounce, up approximately 0.6%, as a persistently weaker U.S. dollar continued to offer some support.

Undercurrents Beneath "End-Stage" Ceasefire Talks While Trump's optimistic comments acted as a stimulant, they also punctured gold's safe-haven bubble. He indicated that joint military actions with Israel against Iran were concluding, while Pakistan's Army Chief rushed to Tehran in an effort to prevent renewed conflict. The White House Press Secretary further revealed that U.S. and Iranian officials are considering returning to Pakistan for face-to-face negotiations, with Israel and the U.S. sharing the strategic goal of demanding Iran remove enriched uranium, eliminate uranium enrichment capabilities, and fully reopen the Strait of Hormuz, a critical shipping channel. However, reality is harsher than rhetoric. Iran's Revolutionary Guards maintain their declaration of a 45-day blockade of the Strait of Hormuz. Although a two-week ceasefire agreement is in place, the strait's navigational status remains unclear. Daily transit volumes are a fraction of the pre-conflict level of over 130 crossings, effectively paralyzing about one-fifth of global oil and gas transportation. This has directly led to a cumulative supply loss of 496 million barrels of Middle Eastern crude and condensate. The U.S. Treasury Secretary announced the termination of waivers for oil purchases from Iran and Russia, and moved to sever Iran's maritime trade through sanctions on over 20 individuals, companies, and vessels. Meanwhile, Israeli Prime Minister Netanyahu warned in a video statement that Israel is prepared for renewed conflict with Iran, will continue strikes against Hezbollah in Lebanon, and has conducted large-scale airstrikes in southern Lebanon. The 98th Division has completed an encirclement of Hezbollah's stronghold in Bint Jbeil, claiming over 1,700 Hezbollah fighters killed in the past six weeks. This contradictory situation—"peace talks ongoing, military actions continuing"—leaves gold investors in a dilemma. Traditionally, escalating geopolitical conflict boosts gold's safe-haven appeal, yet prices saw profit-taking after Trump's "nearing end" remarks. Kitco Metals senior analyst Jim Wyckoff noted that gold recently rose on improved risk appetite and fell on heightened risk aversion, a complete departure from its traditional role. Traders are now focused less on pure war risk and more on the long-term impacts of tighter monetary policy and inflationary pressures.

Oil Prices Volatile at High Levels: Inflation Specter Returns, Gold's Hedge Appeal Dims The ongoing disruption in the Strait of Hormuz provides stubborn support for oil prices. Brent crude edged up 0.1% to $94.93 per barrel, while U.S. crude settled at $91.39, down about 0.7%. Despite market hopes for a U.S.-Iran détente, the reality of supply disruptions makes a rapid decline in energy prices unlikely. Chicago Fed President Goolsbee stated Tuesday that if the Iran war keeps oil prices elevated for an extended period, delaying the return of inflation to the 2% target, the Fed might not cut rates until 2027. This remark instantly dashed market hopes for significant easing this year. Current market pricing suggests only a 32% probability of a U.S. rate cut by 2026, with a 98.4% chance of rates holding steady in April, and just a 33.7% chance of a cumulative 25-basis-point cut by December. The specter of higher interest rates directly undermines the appeal of non-yielding gold. The opportunity cost of holding gold increases sharply, prompting investors to favor higher-yielding bonds or stocks. Although the U.S. dollar index dipped slightly to 98.08, strong demand for U.S. assets and fading rate cut prospects continue to support it. European Central Bank policymakers also remained cautious, with Nagel emphasizing the Strait of Hormuz situation will be crucial for the next policy decision, while another official noted the transient effects of the Iran war are gradually materializing in energy markets. Meanwhile, U.S. stocks defied the trend to hit new highs. The S&P 500 rose 0.80% to 7,022.95, and the Nasdaq surged 1.60% to 24,016.02, marking its first 11-day winning streak since November 2021. Tech and financial stocks led gains, with better-than-expected earnings from Bank of America and Morgan Stanley further boosting sentiment. The Treasury market exhibited a "bear steepening," with the 10-year yield rising to 4.282% and the 2-year yield edging down to 3.766%, widening the yield curve spread to 51.1 basis points, reflecting growing investor concern about inflation expectations.

Trump's "Fire Powell" Threat: Fed Leadership Transition Adds Uncertainty, Alters Gold's Long-Term Logic Deeper disturbances stem from the power struggle between the White House and the Fed. Trump threatened Wednesday to dismiss Fed Chair Powell if he does not resign from the Board of Governors when his term as Chair ends on May 15th. This complicates the confirmation process for presumed successor Warsh and highlights unprecedented pressure on Fed independence. An ongoing criminal investigation into Powell by the Trump administration, coupled with scrutiny over the Fed building renovation project, amplifies market concerns about monetary policy uncertainty. Against this backdrop, gold's pricing logic is subtly shifting. Over the past two years, a combination of geopolitical conflict, inflation expectations, and rate cut hopes fueled a gold bull market. Now, prospects for peace talks and the Fed's "delayed easing" create a dual headwind. Analysts widely believe gold will maintain a weak and volatile pattern in the near term, with the high of $4,871 likely acting as a temporary ceiling, and the area around $4,790 providing key support. Investors are closely watching substantive progress in next week's U.S.-Iran talks, as well as further validation from macro indicators like EIA crude inventories and U.S. import prices.

Gold's Path Forward: A Crossroads of Risk and Opportunity In summary, this gold price pullback is not merely a technical correction but an inevitable result of deeply intertwined global macro and geopolitical factors. The transition of the U.S.-Iran conflict from "hot war" to "peace talks" may reduce extreme risk premiums but also exposes the fragility of energy supply chains and the persistence of inflation. Hints of a Fed rate cut not materializing until 2027 reinforce expectations of a high-rate environment, putting gold's traditional appeal—as a safe-haven and inflation hedge—to an unprecedented test. Yet crisis often breeds opportunity. If the Strait of Hormuz blockade persists beyond expectations, or if conflict between Israel and Hezbollah escalates again, gold could swiftly return to its safe-haven role. Conversely, if a substantive U.S.-Iran agreement is reached, oil prices fall, and inflationary pressures ease, gold could face a more prolonged adjustment. Regardless, the gold market is never an isolated battleground; it is a concentrated reflection of global risk appetite, inflation expectations, monetary policy, and geopolitics. As Trump's "remarkable two days" approach, every development in U.S.-Iran talks, every fluctuation in oil prices, and every comment from Fed officials will determine gold's next directional move. Looking ahead, whether gold can escape its current predicament depends on the evolution of several key variables. The primary variable is substantive progress in U.S.-Iran negotiations—a comprehensive agreement covering not just a ceasefire but also freedom of navigation in the Strait of Hormuz and limits on Iran's nuclear capabilities would significantly reduce geopolitical risk premiums, potentially leading to a deeper correction in gold. Conversely, if talks collapse and hostilities resume, spreading to a wider Middle Eastern conflict, gold's safe-haven attributes would be reactivated. The second variable is oil price trends and inflation data—if energy prices remain high and begin feeding into core inflation, the Fed might be forced to pivot earlier, acting as a catalyst for a gold breakout; if oil prices gradually decline and inflation moderates as expected, high rates will continue to suppress gold. The third variable is the leadership transition at the Fed—whether Powell departs gracefully, whether Warsh is confirmed smoothly, and how the new power structure influences the orientation of monetary policy will profoundly impact market expectations for the future path of interest rates.

Spot gold was quoted at $4,821.90 per ounce at 07:40 Beijing Time.