Gold Finds Support as the Dollar Softens

Gold started the week on a steadier note, with the June COMEX contract rising 0.6% to $4,550 per ounce. A softer U.S. dollar helped improve affordability for overseas buyers, giving bullion some short-term support after a difficult month. Silver also moved higher, gaining 1.1% to $70.520 per ounce, reflecting broader interest across precious metals.

Still, the bigger backdrop remains challenging. Brent crude has climbed above $115 per barrel, marking a 60% rise in March, as tensions in the Middle East continue to fuel concerns over supply disruption and inflation. Higher energy prices are not just lifting costs directly. They are also reinforcing expectations that inflation may stay elevated for longer, which complicates the outlook for central banks.

That shift is especially important for gold because markets have sharply reduced expectations for Federal Reserve rate cuts this year. Earlier hopes for two cuts have faded as rising oil prices keep inflation risks alive. If rates stay higher for longer, gold faces a tougher environment, since non-yielding assets tend to become less attractive when interest rates remain elevated.

From a technical perspective, gold is trying to stabilise after a sharp pullback from the 5,598 high. Price is attempting to base around current levels, but the rebound still looks fragile. The first resistance zone sits around 4,575 to 4,650, while support is seen near 4,400 to 4,275. A move above resistance could help improve the structure, but unless gold can break and hold higher, rallies may still face selling pressure.

For now, the market remains caught between competing forces. A softer dollar and geopolitical tension are offering support, while elevated oil prices, firm rate expectations and lingering macro uncertainty continue to limit upside. Until those pressures begin to ease, gold may remain in a fragile and reactive range.

Explore how the dollar, oil prices and Fed expectations are shaping the outlook for gold and the broader precious metals market.