During Tuesday’s session, gold surged sharply, testing the $4,600 level. Driven by a combination of safe-haven demand and shifting policy expectations, prices briefly rebounded to higher levels before losing momentum. Spot gold is now trading within a key range, with the market entering a phase of consolidation and short-term caution.

Commerzbank expects gold prices to reach $5,000 per ounce by the end of this year, up from its previous forecast of $4,900, and to rise further to $5,200 before 2027. This long-term bullish outlook is supported by global uncertainty, continued central bank gold purchases, and evolving monetary conditions, reinforcing gold’s strategic role as a safe-haven asset.

While the Middle East conflict continues, its marginal impact on markets is gradually diminishing. As the conflict enters its fifth week, pricing of extreme risks appears increasingly complete, and safe-haven sentiment has failed to push gold significantly higher. At the same time, expectations of a pullback in oil prices have eased concerns about a renewed surge in inflation, weakening short-term support for gold.

The Federal Reserve’s policy stance has become a key driver of market sentiment. In his latest remarks, Fed Chair Jerome Powell stated that the overall inflation outlook remains manageable and that there is no immediate need to raise interest rates. This more dovish tone has alleviated concerns about further tightening and provided support to the bond market, which had previously been under pressure.

Powell’s dovish stance is reshaping market expectations. While easing upward pressure on interest rates provides some support for gold, it also reduces the persistence of safe-haven-driven demand. Meanwhile, pricing in the interest rate market has shifted significantly. According to CME data, the probability of a 25-basis-point rate hike in April has dropped to just 2.6%, effectively being priced out by the market. This suggests that short-term rate pressure on gold has eased, but also reflects improving risk appetite.

From a market sentiment perspective, the trading narrative is shifting from “safe-haven driven” to “correction and repricing.” After the strong rally, investors are taking profits, leading to weaker upward momentum. At the same time, as geopolitical risks ease at the margin, markets are increasingly waiting for new catalysts.

Market Interpretation:

On the 4-hour chart, gold is showing a strong rebound, with MACD lines and volume bars expanding above the zero axis. Looking ahead, gold’s trajectory will depend on new macro drivers, including inflation trends, monetary policy direction, and geopolitical developments. Prices are likely to remain range-bound at elevated levels, with intermittent pullbacks.