Gold down on stagflation worries, firmer greenback

Gold is sharply lower into midday Monday as markets reprice the Iran conflict as a longer-lasting, stagflationary shock—supportive for inflation hedges but negative for real rates and the USD. April Comex gold was last down $65.50 to $5,092/oz, while May silver rebounded to slightly positive (+$0.169) at $84.50/oz. The U.S. dollar index at a 3.5-month high is an additional headwind for gold. Bloomberg framing is that investor optimism for a quick Middle East resolution is fading, with Trump comments seen as increasing perceived tail risk and keeping energy prices elevated. IMF MD Georgieva warned prolonged hostilities could create a “new normal”; she quantified that a 10% energy price rise sustained for a year would lift global inflation by ~40bp and slow growth—classic stagflation risk that can lift nominal yields and pressure gold if the USD/rates channel dominates. Central bank demand remains a key offset: China’s PBoC reportedly added 30,000 oz in February, extending purchases to 16 months, taking reported holdings to 74.22mn fine troy ounces. However, WGC noted net central bank buying slowed to 5 tonnes in January vs a 12-month average of 27 tonnes, with some recent selling cited (e.g., Russia, Venezuela) and Poland discussing potential sales to fund defense—introducing two-way CB flow risk. Near-term catalysts are driven by the war/energy path and USD/rates: crude is ~+$98/bbl after an overnight spike near $120, and UST 10y yields are ~4.2%. Technically, bulls need a close above $5,434 for renewed upside momentum; bears are focused on a breakdown below $5,000. Immediate resistance is $5,210 then $5,250; key support is $5,000.