Gold sell-off targets $4,620 amid weaker geopolitical premium and Fed hawkish stance

Gold is now trading near $4,700, retreating from this week’s highs. The recently announced extension of the two-week truce in the Persian Gulf to an indefinite period has become a signal to take profits. As the threat of immediate escalation fades, the geopolitical premium also drops, leaving bullion without a key pillar of support.

However, inflation risks are not going anywhere. Despite the new temporary agreement, the Strait of Hormuz remains blocked to international shipping. Consequently, the energy shock is still acute, and consumer prices are poised to climb higher. This factor could cap gold’s upside till the end of the year, even as geopolitical jitters ease.

Investors are growing increasingly convinced of the Federal Reserve’s (Fed) tightening bias. Kevin Warsh's confirmation hearing for the Chair position reinforced market concerns. The official proved himself to be a supporter of hawkish rhetoric and an independent, inflation-focused policy. The US central bank’s current rate range of 3.5%–3.75%—one of the highest among developed economies—keeps weighing on the precious metal.

Market structure presents another hurdle on gold’s way up. Traders from Asian countries have a habit of taking profits whenever prices approach $4,850. Meanwhile, major players avoid accumulating positions due to ongoing uncertainty.

From a technical perspective, the precious metal is now moving within a downtrend. The Chaikin Oscillator confirms this dynamic, staying in positive territory but steadily diving deeper. This is a sign of waning bullish momentum and shrinking purchase volumes. The Average Directional Movement Index (ADX) makes the situation even more acute. The indicator sits at 15, suggesting that the current trend is weak. However, a crossover of -DI (19) above +DI (11) points to short-term sellers’ dominance and fading buying activity since mid-April.

Keep in mind the following trading strategy:

Sell gold at the current price, with Take profit at $4,620 and Stop loss at $4,770.

The forecast is valid from April 23 till April 30, 2026.