Gold traded lower on Wednesday, with prices near $5,180 after a daily high of about $5,223.23. A firmer US Dollar and higher Treasury yields limited gains, after US inflation data came in broadly as expected. US CPI rose 0.3% month-on-month in February, up from 0.2% in January, while headline CPI stayed at 2.4% year-on-year. Core CPI rose 0.2% month-on-month, down from 0.3%, and held at 2.5% year-on-year.

Inflation And Rate Expectations

The figures left inflation above the Federal Reserve’s 2% target, and markets expect rates to stay unchanged next week. The US-Iran war entered its 12th day, with the US and Israel striking Iranian military targets and Iran responding with missile and drone attacks. Shipping through the Strait of Hormuz slowed, and the US military said it destroyed 16 Iranian vessels it believed were preparing to lay naval mines. The IEA agreed to release about 400 million barrels of oil from strategic reserves. On the 4-hour chart, gold held above the rising 100-period SMA near $5,139, with resistance at $5,200. RSI eased to about 53 from above 60, while MACD stayed positive; support sits near $5,139, then $5,000, and resistance is near $5,238 and $5,400-$5,500.

Key Levels And Strategy

Looking back to early 2025, we remember gold struggling to break past $5,200 even with an active US-Iran conflict, as a strong dollar capped its gains. Today, with gold trading around $4,950, the environment has changed, but the underlying tensions in the market persist. The resolution of that conflict saw gold prices pull back, and we are now assessing if the floor has been set. The persistent inflation noted back then, when February 2025 CPI was 2.4%, proved to be a long-term issue. The most recent data for February 2026 shows headline CPI has ticked back up to 2.8%, fueling the view that the Federal Reserve will hold rates steady through the summer. This sticky inflation continues to support the US Dollar, creating headwinds for gold just as it did last year. Volatility is a key consideration for us now. During the peak of the 2025 conflict, implied volatility on gold options was extremely high, making it expensive to bet on price direction. Today, the Cboe Gold Volatility Index (GVZ) is trading at a much calmer 16, presenting a cheaper opportunity to buy call options to position for a potential move higher. The geopolitical risk premium has fallen since the war ended, but it has not vanished. WTI crude oil has stabilized around $95 a barrel, well below its 2025 wartime highs but still elevated enough to signal ongoing supply chain concerns in the Strait of Hormuz. This elevated energy cost continues to feed into global inflation, providing underlying support for hard assets like gold. The technical levels from last year are now critical markers for our current strategy. The $5,000 psychological price point, which was an area of support in March 2025, has now become the key resistance level we must overcome. We should consider building positions below this level, using strategies like bull call spreads to target a break toward the old $5,200 resistance zone in the coming weeks. Create your live VT Markets account and start trading now.

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