MW Gold has climbed back above a key trend line. Are more gains on the way?

By Frances Yue

The yellow metal is getting its mojo back

Gold hit a record high in January and has since pulled back.

Gold broke above an important short-term technical level on Friday - a sign that the precious metal may be starting to regain momentum after a sluggish stretch since the start of the Iran conflict.

Futures contracts tied to gold (GC00) on Friday moved above their 21-day moving average, a short-term trend line traders use to judge whether momentum is improving, according to Tyler Richey, technical analyst and co-editor at Sevens Report. Gold futures also tested their 50-day moving average for a second straight session, with that trend often seen as a more important gauge of the market's medium-term direction, Richey noted in written commentary shared with MarketWatch.

Meanwhile, front-month gold futures rose $20.60, or 0.44%, to settle at $4,720.40 an ounce on Friday. That marked the metal's fourth straight daily gain - its longest winning streak since April 9, according to Dow Jones Market Data. For the week, gold futures rose $90.50 per ounce, or 1.95%. They were up 9.1% so far this year, though remaining 11.2% below the January record high of $5,318.40.

Gold has been one of the year's most closely watched trades. The yellow metal rallied sharply last year and extended its gains into early 2026, helped by central-bank buying and worries about profligate spending and currency debasement around the world - but particularly in the U.S.

But after hitting a record in January, bullion prices backed off.

Gold's latest gain has been primarily driven by a weaker dollar, as optimism around a potential peace deal between the U.S. and Iran helped ease some fears tied to the conflict, according to Lukman Otunuga, head of market research at global trading broker FXTM. Gold is priced mainly in U.S. dollars, so a weaker dollar tends to make the metal cheaper for buyers using other currencies, which can support demand. The ICE U.S. Dollar Index DXY, a gauge of the greenback against a basket of its rivals, fell 0.2% to 97.84 on Friday, on pace for its lowest close since Feb. 27.

Energy prices remain elevated - but as the risk of another sudden leg higher for oil prices (CL00) (BRN00) eases, the Federal Reserve might similarly feel reduced pressure to potentially raise interest rates, according to Aakash Doshi, global head of gold strategy at State Street Investment Management. That could also help boost the price of gold.

Central-bank demand has continued to help support the market, noted Doshi. China has continued to add to its gold reserves, with the People's Bank of China pushing up its holdings for an 18th straight month in April, according to data released Thursday by the central bank.

Still, gold faces a tricky setup, as renewed inflation concerns could quickly become a headwind, if recent history is any guide.

Fed-funds futures traders are pricing in at least a 14.4% chance that the Federal Reserve will raise its key interest rate at least once by year-end, according to CME FedWatch data.

From a technical perspective, gold is trying to break out of the weak, sideways trading pattern that has been in place since early April, Sevens Report's Richey said. The metal's chart patterns aren't yet sending any clearly bullish signals, and the near-term trend still leans weaker, he noted.

Gold would need to break more convincingly above the $4,800- to $4,900-an-ounce range to show that the bulls are really back in control, Richey added - while, on the downside, a close below $4,400 would be a warning sign.

-Frances Yue

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May 08, 2026 17:44 ET (21:44 GMT)

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