I noticed something interesting in the gold market during the recent Asian session. Despite escalating geopolitical risks in the Middle East—negotiations stalled and tensions between Washington and Iran increased significantly—gold prices did not react as one might expect. Instead of surging due to safe-haven demand, the yellow metal opened with a sharp decline, suggesting that the market shifted its focus.

The reason is clear: inflation in the United States remains much more concerning than some thought. March data showed an annual CPI of 3.3%—significantly higher than the previous 2.4%—and the monthly component reached 0.9%, much stronger than expected. The core CPI also remained resilient at 2.6% annually. This is what is truly moving the markets right now.

What happened with oil explains it all. WTI jumped nearly 8.5%, opening around $105 per barrel, driven by concerns over supply disruptions. This energy price increase directly reinforces expectations that inflation will remain a problem. And when inflation persists, the Federal Reserve does not lower rates—in fact, it’s likely to keep them elevated longer.

That’s the dilemma for gold. An interest-free asset becomes less attractive when rates rise because the opportunity cost of holding it in a portfolio becomes more expensive. Although geopolitical risks usually favor precious metals, today’s market is weighing more heavily on the impact of inflation on monetary policy. The dollar is strengthening on expectations of sustained rates, further compressing the room for gold to rise.

From a technical standpoint, after that bearish opening gap, gold rebounded and settled near $4,710. But the daily structure shows consolidation at highs with a bearish bias. Major resistance levels are at $4,750 and $4,800, while support is in the $4,600–$4,520 range. The MACD is showing bearish crossovers at highs, and the RSI has fallen from overbought territory, indicating a loss of momentum.

Looking at the bigger picture, we are facing a typical energy-driven inflation structure. The rise in oil prices not only affects direct energy costs but propagates through transportation and production chains. This environment encourages investors to prefer assets that generate returns over safe-haven, interest-free assets.

What comes next will depend on two key variables. First, whether the situation in the Middle East worsens enough to truly disrupt energy supply. Second, whether inflation in the U.S. continues to rise or finally eases. If inflation remains high, gold will likely stay under pressure. But if geopolitical risks escalate dramatically, safe-haven demand could change the game. For now, gold seems destined to consolidate at high levels as the market navigates between macroeconomic policy and geopolitical tensions.