Central Bank Focus
Expectations have shifted towards fewer and later rate cuts, keeping pressure on non-yielding gold. Traders now price in about 25 bps of Fed cuts by year-end, down from more than 50 bps earlier. The CME FedWatch Tool shows the Fed expected to stay on hold through April, June and July. September is seen as the most likely start for a cut, with a 50.8% probability. Geopolitical tension also supported gold, as disruption in the Strait of Hormuz continued and the US-Israel and Iran conflict showed no clear easing. Kevin Hassett said the conflict could be resolved in four to six weeks. On the 4-hour chart, gold stayed below the 100-period SMA near $5,158 and faced resistance at the 200-period SMA at $5,061. RSI was around 39 and ADX near 35.Technical Levels Update
Support sat at $4,967, then $4,850 and $4,650. A break above $5,061 could target $5,158 and then $5,200. Looking back at the market anxiety of 2025, we recall how gold’s price was trapped by the dual threats of a US-Iran war and central bank hesitation. The focus was on whether policymakers would delay rate cuts due to oil-driven inflation fears. That landscape has now changed, presenting different risks and opportunities for us today on March 17, 2026. The de-escalation of the Strait of Hormuz conflict in late 2025 removed the significant war premium that was supporting gold prices. WTI crude oil, which briefly spiked over $110 per barrel during that crisis, has since stabilized and now trades around $85. This has significantly dampened the inflation fears that dominated markets last year. With the geopolitical flare-up in the rearview mirror, our attention has returned squarely to economic data. The latest US Consumer Price Index report for February 2026 showed inflation at 2.8%, which, while still above the 2% target, confirms a cooling trend from the 2025 highs. This has shifted market expectations firmly toward potential rate cuts this year. For derivative traders, this means the strategy of buying call options as a hedge against geopolitical conflict is no longer the primary play. We should instead be looking at implied volatility, which has fallen considerably from the peaks seen during the 2025 conflict. Selling volatility through strategies like short strangles could be advantageous, assuming no new major economic shocks before the next central bank meetings. The market is now pricing in a nearly 60% probability of a 25-basis-point rate cut by the Federal Reserve in its June 2026 meeting. Traders can position for this by using call spreads on gold, which offers a cost-effective way to bet on a dovish policy shift driving prices higher. This is a shift from the defensive puts we saw being bought when gold was struggling above $5,000 last year. The technical levels from 2025, such as the $5,061 and $5,158 moving averages, are now distant memory and represent major resistance. With gold currently trading near $4,750, we should structure new positions around the developing support base near $4,650. Any options strategies should use strikes relevant to this new, lower trading range. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
