Gold Trading Alert: Gold price surges back to 4750 as Iran-Israel conflict is on a knife edge and CPI approaches—Will gold head straight for 5000 by year-end?

　　Geopolitical uncertainty shrouds the market, safe-haven demand lifts gold prices

　　On Monday, U.S. President Trump made it clear that the ceasefire agreement with Iran was "hanging by a thread." He quickly rejected Iran's response to the U.S. peace proposal, deeming their conditions "completely unacceptable." This conflict, now in its tenth week, has resulted in thousands of casualties and severely disrupted global energy supply, especially as shipping through the Strait of Hormuz has all but ground to a halt. The strait previously handled about one-fifth of the world's crude oil and liquefied natural gas transport. Now, shipping volumes have plunged to extremely low levels, with many tankers even turning off their trackers to avoid risk.

　　In response, international oil prices rebounded sharply, with Brent crude rising nearly 3% to around $104, and U.S. crude approaching the $100 level. The surge in oil prices directly heightened global inflation expectations, reinforcing market consensus around "prolonged high interest rates." Although a high interest rate environment typically pressures gold, the safe-haven demand and potential for sustained inflation arising from geopolitical tensions have instead provided significant support for gold prices. Analysts at ING pointed out that the stalemate in peace talks has increased short-term uncertainty, but they remain optimistic, maintaining their year-end gold price forecast at $5000/oz.

　　Inflation data to take the stage, U.S. Federal Reserve policy in the spotlight

　　This week, the market faces a test from key U.S. inflation data. The Consumer Price Index (CPI) will be released Tuesday, while the Producer Price Index (PPI) comes out Wednesday. Analysts expect the overall April CPI to rise 0.6% month-on-month and 3.7% year-on-year; core CPI is expected to rise 2.7% year-on-year. The PPI is also under upward pressure, with the pass-through effect of oil prices meriting close attention.

　　U.S. Treasury yields rose on Monday, with the 10-year yield climbing to 4.404% and the two-year noticeably higher as well, reflecting renewed market concerns about oil-fueled inflation. Stronger-than-expected April nonfarm payrolls have further reduced the likelihood of a Fed rate cut in the short term. Major institutions such as Goldman Sachs have now postponed their rate cut expectations to the end of 2026. The Fed currently finds itself in a dilemma: it must assess both the inflationary impact of higher oil prices and whether the labor market is beginning to soften further.

　　According to U.S. gold market analyst Jim Wyckoff, there is clear dip buying in the market at present, as investors adjust their positions ahead of this week's inflation data. This repositioning itself also provides short-term support for gold prices.

　　Multiple factors intertwine, global gold demand diverges

　　In addition to the U.S.-Iran situation and American economic data, other major international events are affecting market sentiment. This week, Trump is set to make a two-day visit to China for meetings with President Xi Jinping, during which they will discuss Iran, artificial intelligence, and nuclear weapons. This diplomatic development is closely watched, as China may play a significant role in resolving the Iran issue.

　　On the other hand, Indian Prime Minister Modi has called on the public to halt gold purchases for the next year to protect the country's foreign exchange reserves. As the world's second-largest gold consumer, this stance has sharply hit local jewelry retailer share prices. However, globally, the divergence in physical gold demand has not entirely undermined the precious metal's safe-haven appeal.

　　Outlook: Short-term volatility, medium-to-long-term upside potential remains

　　The current gold market finds itself in a classic "coexistence of risk and opportunity" stage. The prolonged U.S.-Iran conflict and continuing uncertainty in the Strait of Hormuz have provided a solid safe-haven floor for gold prices; meanwhile, the direction of U.S. inflation data and Fed policy will determine whether there is further upside room for gold.

　　If this week's CPI and PPI data come in above expectations, and the geopolitical conflict remains unresolved, gold is likely to continue challenging higher levels. Conversely, substantial signs of a ceasefire could exert short-term downward pressure on gold prices. However, from a longer-term perspective, targets such as ING's $5000 remain relevant—the global macro backdrop of rising uncertainty and persistent inflation risk provides ongoing, if neutral-to-bullish, support for gold.

　　Overall, gold, as a traditional safe haven and hedge against inflation, is once again demonstrating its unique value in the current complex international environment. Investors need to closely track this week's U.S. inflation data and the progress of Trump's visit to Beijing, adjusting strategies flexibly. Regardless of short-term volatility, gold's importance in global asset allocation is becoming increasingly pronounced with evolving geopolitical risks. In the period ahead, gold prices are likely to remain strong and range-bound at elevated levels, warranting continued attention.

Editor: Zhu Henan