On Tuesday, May 12, international spot gold prices touched a low before rebounding to close lower. Escalating tensions between the US and Iran, which showed no signs of easing, combined with a US Consumer Price Index (CPI) reading for April that exceeded expectations, weakened prospects for interest rate cuts and pressured gold prices downward. However, safe-haven buying support and persistent inflation, which bolsters gold's appeal as an inflation hedge, ultimately fueled a rebound from the session's lows.
Despite closing above its middle Bollinger Band and the 30-day moving average, the metal now faces key resistance at the 100-day and 60-day moving averages. A decisive break above this resistance zone is necessary for the bull trend to resume; failure to do so could lead to further consolidation and corrective pullbacks.
In terms of price action, gold opened the Asian session at $4,736.96 per ounce, briefly reaching an intraday high of $4,773.29 before encountering resistance and trending lower throughout the day. The decline extended into the US session, with the price hitting a low of $4,638.88 around 23:00 UTC before staging a sustained rebound. It closed at $4,714.86, marking a daily range of $134.41, a loss of $22.1, or 0.47%.
Looking ahead to Wednesday, May 13, gold opened higher, extending its late-session recovery momentum from the previous day and initially trading with strength. A weakening US dollar index and reduced upward momentum in crude oil prices during the early session provided some support.
However, crude oil's daily chart shows it remains within a consolidation range, while its weekly chart indicates ongoing wide-range volatility with potential for an upward move. The monthly chart's prolonged high-level consolidation also signals a potential topping pattern. Consequently, even if oil prices strengthen further, the resulting pressure on gold is likely to be limited.
Rising oil prices, which fuel inflation, would increase economic pressure and enhance gold's commodity attributes. Interest rate hikes driven solely by inflation rather than an overheating economy would have a limited negative impact on gold. Instead, sustained oil price increases could eventually support a gold price rebound. In such a scenario, the US dollar would also struggle to attract safe-haven flows, likely remaining weak and providing further support for gold.
The market's focus today will be on the US Producer Price Index (PPI) data for April, both year-over-year and month-over-month. Expectations are for stronger inflation readings. If the data meets or exceeds forecasts, gold may face another corrective pullback, though it is expected to remain within its adjustment phase. Conversely, if the data is more moderate, interest rate expectations could see a marginal improvement, potentially allowing gold to regain upward momentum.
From a fundamental perspective, although the current geopolitical risks have not translated into upward momentum for gold in the traditional sense, the dominant factor—oil price prospects—directly reinforces inflation expectations and raises the level of nominal interest rates, thereby reducing gold's appeal.
As long as tensions in the Strait of Hormuz do not see a substantive de-escalation, oil prices are likely to remain elevated. The resulting heightened inflation expectations will repeatedly suppress gold's safe-haven premium, keeping the metal in a consolidation phase.
Nevertheless, the medium- to long-term bullish logic and outlook for gold remain fundamentally intact, with structural support for new highs in the bull market still solid.
According to institutional forecasts, combined demand from investors and central banks is projected to average 585 tons per quarter for the full year 2026—a scale sufficient to support a move toward $5,000 per ounce. Furthermore, if just 0.5% of globally held US assets were to flow into gold, it would be enough to push prices toward a long-term target of $6,000.
From a demand structure perspective, the trend of central bank gold purchases remains the most solid foundational support for the gold market. In recent years, gold has, for the first time, surpassed US Treasuries to become the world's largest reserve asset. A 2025 survey indicated that 95% of central banks expect global gold reserves to continue growing in 2026. The People's Bank of China has also been steadily increasing its gold purchases this year. This structural demand provides a long-term, rigid price floor for gold.
In summary, gold is currently in a tug-of-war between short-term pressure (higher interest rate expectations due to elevated inflation) and long-term support (geopolitical risks and central bank buying). Until this dynamic is broken, gold prices are likely to maintain a wide-range, high-level consolidation pattern.
Once tangible signals emerge of a substantive easing in tensions around the Strait of Hormuz, a subsequent decline in oil prices would simultaneously alleviate inflation pressure. At that point, the hedging relationship between geopolitical safe-haven demand and the inflation path could unwind, allowing gold's safe-haven attributes to reassert dominance and potentially drive prices to new highs.
On the technical front, the monthly chart shows gold closed April below its 5-month moving average, indicating strengthening bearish momentum and suggesting a potential for consolidation with a downward bias in the near term. Key support remains the rising trendline. As long as prices hold above this level, the bull market outlook remains viable. A monthly close above the 5-month moving average around $4,800 would significantly strengthen the bullish case, opening the door for a retest of $5,200. Conversely, a break below the support trendline could signal a shift to weaker consolidation or even the end of the bull market, though the latter scenario currently appears less probable.
On the weekly chart, gold has rebounded after touching below its 30-week moving average for two consecutive weeks, forming hammer-like candlesticks. This adds potential bullish momentum, but a sustained move back above the middle Bollinger Band is needed to strengthen the case for a move toward the $5,000 level or higher. Otherwise, the risk of a downward adjustment remains.
On the daily chart, the current rebound is encountering resistance at the 100-day and 60-day moving averages. Bulls need to decisively break above this resistance to pave the way toward the key $5,000 level and enhance prospects for new highs. Until such a breakout occurs, a consolidation and adjustment phase is expected. For staged trading strategies, focus on support levels such as the 144-day or 200-day moving averages. Intraday trading can reference shorter timeframes like the 4-hour and 1-hour charts.
Preliminary intraday trading level references are as follows. Specific entry and exit points should be confirmed based on real-time market conditions: Gold: Support to watch around $4,670 or $4,620; Resistance to watch around $4,760 or $4,800. Silver: Support to watch around $85.70 or $84.40; Resistance to watch around $88.50 or $90.10.