Gold climbed above USD 4,720 on May 8 as U.S.-Iran ceasefire optimism lifted prices to a three-week high. But a strong jobs report and sticky Inflation keep the Federal Reserve's rate path uncertain. Here is what institutional forecasts and macro data signal for gold's next move.

Key Highlights

  • Spot gold rose above USD 4,720 per ounce on May 8, its highest level since April 22, posting a weekly gain exceeding 2%.
  • Gold has declined more than 10% since the U.S.-Iran war began February 28, weighed down by oil-driven inflation and rate expectations.
  • April payrolls came in at 115,000, nearly double consensus, complicating the Federal Reserve's easing timeline.
  • Central Bank gold accumulation and de-dollarisation trends continue to underpin the structural Demand case.

A Market Caught Between Diplomacy and Data

Gold's recovery this week was never straightforward. Prices climbed above USD 4,720 per ounce on Friday, reaching their highest level since April 22 and heading for a weekly gain of over 2%, as optimism surrounding a potential U.S.-Iran peace agreement eased concerns that persistent inflation could keep interest rates elevated for longer.

Yet the geopolitical situation remained delicate. Despite a recent exchange of fire between the U.S. and Iran, the most significant test of their month-long ceasefire, Iran stated that the situation had stabilised, while President Donald Trump confirmed the ceasefire remained in effect.

The week's price action captures a market pulled in opposing directions: cautious diplomatic progress on one side, and a macroeconomic environment that continues to resist easy conclusions on the other.

How the War Broke Gold's Safe-Haven Logic

The suppression of gold throughout the conflict period followed a clear transmission mechanism. The effective closure of the Strait of Hormuz drove a historic surge in energy prices. That surge fed into inflation expectations, forcing markets to price out monetary easing and, in several major economies, price in the prospect of rate hikes.

Since the war began in late February, gold has dropped more than 10%, pressured by rising oil prices that fuelled inflation worries and clouded the outlook for interest rates. For an asset traditionally associated with safe-haven demand, gold found itself caught on the wrong side of the rate equation. Markets have broadly priced out any near-term Federal Reserve easing, with rate cut expectations for the June meeting sitting at negligible levels.

Chicago Fed President Austan Goolsbee reinforced the concern directly, warning that inflation has not continued to cool toward the central bank's 2% target and has instead accelerated since the outbreak of the war.

The Jobs Report Adds Another Variable

Friday's payrolls data complicated the picture further. The economy added 115,000 jobs in April, surpassing expectations of 62,000 and indicating continued strength in the labour market. A labour market this resilient reduces the Federal Reserve's urgency to pivot toward easing.

The April NFP consensus had stood at 62,000, down sharply from March's 178,000 print, with the Unemployment rate expected to hold at 4.3%. The beat landed on the hawkish side of market positioning, reinforcing the view that the U.S. economy retains underlying momentum despite the war's inflationary shock. For gold, that is not an easy environment to break higher from.

Structural Demand Has Not Wavered

Despite the near-term noise, the medium-term structural case for gold remains largely unchanged. The People's Bank of China has bought gold for over 17 consecutive months, and analysts have raised the 2026 average price forecast to USD 4,916, up from USD 4,746 three months ago.

Institutional price targets reflect this confidence. JP Morgan leads with a Q4 2026 target of USD 6,300, with Wells Fargo at USD 6,100 to USD 6,300 and BNP Paribas at USD 6,250.

The thesis anchoring these projections rests on three durable pillars: central bank Diversification away from U.S. Treasuries, structurally elevated inflation that favours real asset allocation, and a de-dollarisation trend that increasingly positions gold as a reserve alternative. Year-to-date, gold remains up 8.5%, extending a 60% rally recorded across 2025.

What Resolution Means for the Price Path

The ceasefire has already reduced the safe-haven premium that drove gold from USD 4,100 to USD 4,800 during March and April. The market is transitioning from headline-driven buying toward structural support, including central bank accumulation, de-dollarisation, and the longer-term rate cut outlook.

A durable peace settlement would remove residual geopolitical risk premium from current valuations. But it would simultaneously ease oil prices, soften inflationary pressure, and potentially reopen monetary easing across major economies. That sequence could prove net constructive for gold over a medium-term horizon.

The next major technical threshold sits at USD 5,000, with the path contingent on ceasefire durability and the upcoming CPI print on May 12 and PPI on May 13.

The Coiled Trade

Gold is not broken. It is waiting for the macro environment to catch up with its structural reality. A peace deal that eases oil, cools inflation, and reopens the door to rate cuts would not merely remove a headwind. It would reactivate every driver that built the 2025 Bull Market in sequence.

Until that clarity arrives, gold trades in the space between diplomatic resolution and data confirmation. The structural case, anchored by central bank demand, de-dollarisation, and real asset allocation, has not shifted. What has shifted is the timeline. That is not a position of weakness. It is a coiled one.