Gold Outlook: Defends Key Support and Eyes a Return to $5,000 Amid Monetary Uncertainty

Recent price action highlights a clear support zone around $4,850, where defensive buying has emerged. On the upside, immediate resistance stands at $5,000, a level that concentrates both technical and psychological orders. A sustained break above $5,000 could open the door to an extension toward $5,100, while a sustained loss below $4,850 may once again expose the $4,750 area.

On the monetary front, the Federal Reserve kept its target range at 3.50%–3.75% at its latest meeting, reinforcing a "data-dependent" narrative. The market is currently pricing in a first rate cut around mid-year, with 50-75 basis points of cumulative easing in 2026 if inflation continues to moderate. However, any signs of persistent inflation could delay that scenario and limit gold's upside.

The U.S. dollar has shown mixed performance, fluctuating after recently touching levels near 97.60 on the DXY index. When the greenback loses momentum, gold tends to benefit, but if real yields on 10-year Treasury bonds remain firm above 2% in real terms, the metal faces increased pressure due to higher opportunity costs.

An additional source of volatility stems from the debate over Federal Reserve leadership. The possibility that Kevin Warsh could replace Jerome Powell introduces uncertainty regarding the pace and depth of future rate cuts. This factor not only influences rate expectations but also affects perceptions of central bank independence. This variable has historically shown a positive correlation with demand for gold as a safe-haven asset.

From a flow perspective, gold-backed ETFs have shown stability in their holdings after weeks of adjustments, while physical demand in Asia has been more selective due to elevated prices. At the same time, central banks continue to act as structural buyers, providing medium-term underlying support to the market.

The broader macroeconomic environment remains decisive. With inflation showing gradual deceleration but still above the 2% target, and economic growth remaining resilient, gold is navigating between two opposing forces: expectations of future monetary easing and the reality of still relatively restrictive interest rates.

In conclusion, gold is attempting to rebuild momentum after falling to $4,843. Still, a sustained recovery to $5,000 will depend on clearer signals regarding the trajectory of U.S. interest rates and the Federal Reserve's institutional stability. As long as the $4,850–$5,000 range holds, the market is likely to remain in a consolidation phase, with buyers defending support and sellers taking profits near resistance. The next breakout will determine whether the metal resumes its structural bullish trend or extends its technical adjustment.