*) see also: InstaForex trading indicators for XAU/USD

Gold is holding above $5,100 per ounce amid geopolitical and tariff risks. XAU/USD retains a mildly bullish tilt and is trading near 5,170.00–5,180.00 at the start of the US session, remaining within the current week's range. Attempts to sustain a move above 5,200.00 have not yet produced a durable follow-through, reflecting investor caution ahead of key geopolitical and macroeconomic events.

Sideways action points to a balance between two forces: demand for safe-haven assets driven by geopolitical risk and support for the US dollar as markets revise expectations for the Fed's rate path (see also our review today, "USD/CHF: geopolitics and prospects").

Geopolitical factors and US trade policy

Markets are focused on the third round of US–Iran nuclear talks in Geneva. The dialogue is unfolding against a backdrop of a significant buildup of US military presence in the Middle East, White House comments about serious consequences if there is no progress, signals from Tehran of "seriousness and flexibility," and stated desires to avoid escalation.

While uncertainty persists, gold is supported as a safe-haven asset. However, a diplomatic breakthrough could reduce the geopolitical risk premium embedded in prices and limit further upside in the metal.

Fresh statements about raising tariffs to 15% where appropriate have increased uncertainty in global trade. After a Supreme Court decision limited the use of IEEPA to impose reciprocal levies, the administration announced a base 10% tariff with potential for increases.

Trade frictions typically support gold because they heighten the risk of a global economic slowdown, lift inflation expectations, and increase demand for safe-haven assets.

Monetary policy of Fed: key restraining factor

Despite geopolitical support, gold faces a restraint from the US dollar. Markets are revising expectations for the Fed's policy rate.

According to the CME FedWatch Tool, investors today price a 98% probability that the Fed will pause policy adjustments. Rates are also likely to remain unchanged in April. July is now seen as a more likely timing for the first cut (around a 66% probability per CME FedWatch).

The shift in expectations supports the dollar and puts downward pressure on a non-yielding metal. If US inflation (PPI, CPI) prints higher than forecasts, rising yields could temporarily cap XAU/USD's potential.

Upcoming releases

After the weekly US Labor Department report published today showing initial jobless claims rose by 4,000 for the reporting week versus the expected 215,000 following 208,000 a week earlier, investor attention has shifted to tomorrow's producer price index (PPI) release at 13:30 GMT.

If inflation prints above forecasts, the dollar will gain support. If the data confirm a slowdown in price pressures, the market could more actively price in up to three rate cuts this year, which would increase pressure on the dollar and support non-yielding gold. As is well known, the price of the metal is highly sensitive to the monetary policy of major central banks, above all the Fed.

Conclusion

Thus, XAU/USD is consolidating above 5100.00, building a base ahead of a possible next impulse. The market is awaiting a trigger — either geopolitical or macroeconomic. While the price holds above 5100.00, the long-term uptrend remains intact. A break above 5200.00 would be a technical signal to resume the advance, whereas a fall below 5025.00 could deepen the correction.

Main triggers:

• US inflation data
• 10-year UST yields: rising yields make bonds more attractive and reduce interest in gold — a non-yielding asset; falling yields increase gold demand. Continued rises in 10-year yields would intensify pressure on XAU/USD.
• Outcome of US–Iran negotiations
• Fed rhetoric