Gold slips despite geopolitical tensions as traders weigh Fed outlook and oil price spike

Gold is set to end the week lower despite escalating Middle East conflict, with spot last at $5,142.60/oz (-2.5% w/w) after failing to hold an early-week safe-haven rally triggered by joint U.S.-Israel strikes on Iran. Desk focus is on downside support around $5,000/oz next week, which analysts describe as “massive support” after being tested earlier in the week. US macro data is adding cross-currents: February nonfarm payrolls were reported down 92,000 (vs ~+58,000 expected) and unemployment ticked up to 4.4% (from 4.3%). The weak print supports expectations for more aggressive Fed easing later in 2026, but that bullish impulse for gold is being offset by a firmer USD and renewed inflation concerns driven by the energy shock. Neil Welsh (Britannia Global Markets) flagged a “push-pull” mix of Middle East haven demand, USD strength, inflation risk, and shifting rate-cut expectations keeping gold “essentially range-bound,” with liquidity stress/portfolio rebalancing and margin-related selling capable of overwhelming short-lived haven bids. Pepperstone’s Michael Brown said bullion has been trading more like a momentum/risk asset, citing an “almost perfect inverse correlation with crude” over the past week—consistent with residual speculative froth from January. Energy is the key near-term catalyst: WTI April is tracking toward ~$90/bbl into week-end (highest since Oct 2023), and analysts warn oil-driven inflation could keep the Fed closer to neutral for longer than the labor data alone implies. Near-term risks skew two-way: a durable ceasefire/de-escalation would likely lift risk appetite and pressure bullion, while further supply disruption and sustained crude strength could keep volatility elevated even if spot holds the $5,000/oz floor.