Gold fell back on Thursday but stayed in a multi-week range. XAU/USD traded near $4,790 after a high of $4,838, with a firmer US Dollar weighing on it.
Talks to end the US-Iran war remained in focus after Donald Trump said negotiations could resume this week following talks in Islamabad that failed to bring a breakthrough. Gulf and European officials told Bloomberg a deal could take up to six months and called for a ceasefire extension and the reopening of the Strait of Hormuz.
Geopolitical Risk And Hormuz Uncertainty
Iran moved to formalise control over the Strait of Hormuz, with state media saying any transit tolls would be paid via Iranian banks. Pakistan-led diplomacy continued, with an Iranian official citing narrower differences in some areas, but ongoing disputes over nuclear issues.
Gold traded about 10% below its post-war peak as oil-related inflation risks kept rate expectations elevated. St. Louis Fed President Alberto Musalem said supply shocks threaten inflation and employment goals, and said core inflation could stay near 3% through year-end.
Technically, gold was below the 50-day SMA near $4,897, with support at the 100-day SMA near $4,708. RSI was around 51 and ADX near 24.
We are looking at a gold market that remains range-bound, a direct consequence of the oil price shock from the US-Iran conflict in 2025. The ongoing, slow-moving peace talks create persistent uncertainty, making strong directional bets risky. For now, gold is consolidating as it awaits a clearer catalyst for its next major move.
Options Strategies For A Range Bound Market
Although Brent crude has fallen from its peak of over $150 a barrel last year, it has settled near a stubborn $95, keeping inflation concerns alive. The most recent March 2026 CPI report confirmed this, with core inflation holding at a sticky 2.8%. This reinforces the Federal Reserve’s decision to keep interest rates unchanged for the time being.
Given this environment, a long straddle or strangle options strategy on gold futures appears sensible for the coming weeks. This involves buying both a call and a put option, positioning to profit from a significant price breakout in either direction. The strategy benefits from the rising volatility expected if peace talks succeed or suddenly collapse.
For those betting on continued stagnation, selling volatility through an iron condor could be a viable approach. This strategy defines a clear profit range, capitalizing on the market staying between key support and resistance levels. It profits from time decay as long as gold does not make a sharp move before the options expire.
The key technical levels from last year remain critical, with support near the $4,700 mark and significant resistance just under $4,900. A decisive break of this channel, likely triggered by news from the upcoming Geneva talks or a surprise inflation report, should be the signal to act. Until then, implied volatility in gold options remains relatively low, making these strategies more affordable.
