Gold price prediction: Is gold heading for volatile trading in May?

Gold rate prediction: Gold price bounced back after hitting a more than one-month low in the previous session, as investors assessed a fragile Middle East truce and the conflict's potential impact on inflation and interest-rate expectations. Spot gold was up 0.8 per cent at $4,557.56 per ounce, after touching its lowest level since March 31 on Monday. U.S. gold futures settled 0.8 per cent ‌higher at $4,568.50. Spot silver firmed 0.4 per cent to $73.03, platinum was up 1 per cent at $1,963.30, and palladium rose 1.5 per cent to $1,501.41.

While gold is traditionally seen as a hedge against inflation and uncertainty, its appeal tends to wane when interest rates are high, as rising ‌yields make non-yielding assets less attractive.

Safe-haven demand remains, even if its influence has weakened as gold is increasingly treated as a risk-sensitive asset, ​said Fawad Razaqzada, ​market analyst at City ⁠Index.


"Nonetheless, the need to hedge against inflation, alongside persistent central bank buying, has helped limit deeper downside moves so far," Razaqzada said.

Meanwhile, the release of the U.S. employment report ​later this week will serve as a test of whether the economy remains resilient enough to keep the Federal Reserve's monetary policy on hold, or whether a softening labor market could revive the case for rate cuts.

"We ⁠are seeing ⁠some bargain hunting after the recent selloff, and oil prices easing are also providing support. The market ​is going to continue to watch the headlines, but we could see focus shift a little ​towards economic data," said Jim Wyckoff, market analyst at American Gold Exchange.

"Gold bulls need a significant fundamental spark to regain their footing," he added.

The United Arab Emirates said ​it was under attack from Iranian missiles and drones, even ⁠as Washington ‌said a shaky ceasefire was intact despite an exchange of ​fire the previous ​day as U.S. forces attempted to force open the Strait ⁠of Hormuz.

The narrow waterway, which carries a large share of ​global oil, fertiliser and other commodity supplies, has been virtually ​closed since attacks began on February 28, driving up prices around the world.

Oil prices slipped on Tuesday, but losses were limited. Elevated energy prices risk stoking inflation and delaying central banks' easing cycles.