Gold Climbs Above $4,713 as Fed Transition Jitters Outweigh Hot CPI Print

Gold staged a sharp rebound on Wednesday morning, pushing back above $4,713 per ounce as traders recalibrated their positions ahead of a historic leadership change at the Federal Reserve. The move reversed much of the previous session’s losses triggered by a hotter-than-expected US inflation reading, underscoring how monetary policy uncertainty is now competing with traditional safe-haven drivers.

The spot price touched $4,713.73, recovering from a local low set Tuesday after the US consumer price index jumped to 3.8% — its highest level in nearly three years. Core inflation also overshot forecasts, sending the dollar and Treasury yields higher. Yet rather than buckling under the weight of rising yields, gold has drawn support from a different source: the impending handover of the Fed chairmanship.

Kevin Warsh is set to assume the helm of the US central bank on May 15, a transition that has injected a fresh dose of uncertainty into financial markets. Traders are scrambling to position for a potentially harder monetary stance, with futures now pricing in a more than 70% probability that the Fed will tilt hawkish rather than dovish through April 2027. Rate cuts for the remainder of this year have been virtually priced out. That shift is usually a drag on gold, but the prospect of a new policy regime has spurred a wave of short covering and defensive repositioning.

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The rally has been further fueled by geopolitical tensions centered on the Strait of Hormuz, where a fragile standoff continues to keep energy markets on edge. US President Donald Trump described a ceasefire with Iran as hanging by a thread, and reports of internal White House discussions about military options have sustained a risk-off undercurrent. Higher oil prices feed into inflation expectations, which in turn support the dollar — a complex dynamic that normally weighs on gold. Yet investors have nonetheless piled into the metal as a hedge against both geopolitical instability and the unknown direction of US monetary policy.

From a technical standpoint, the recovery has been underpinned by solid support near the 50-day moving average at roughly $4,660, which caught the downdraft on Tuesday. The relative strength index has retreated to neutral territory, leaving room for further upside without immediately flashing overbought conditions. The next significant resistance lies at $4,723, with a break above that level opening the path toward the $4,765–$4,795 zone where sellers have previously stepped in.

Institutional demand remains steadfast beneath the surface despite tactical hedging. Global gold ETFs now manage $615 billion in assets, with holdings rising to 4,137 tonnes, signaling no broad-based retreat. On the futures side, however, COMEX net-long positions slipped 4% to 477 tonnes, while European funds recorded notable inflows amid geopolitical and inflation fears. Analysts at State Street see potential for gold to reclaim $5,000 if oil stabilizes between $80 and $85 a barrel, easing inflation pressure and reviving rate-cut speculation. J.P. Morgan projects an average price of $5,055 in the final quarter of this year.

All eyes now turn to today’s US producer price index release, which will provide the next catalyst. A surprisingly high reading could strengthen the dollar and push gold back toward $4,680, while a softer number would clear the way for a test of resistance near $4,780. With the Fed transition looming and the Hormuz crisis unresolved, the metal remains caught between a tightening monetary backdrop and an unrelenting demand for safe havens.

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