Oil Supply Hope Takes Centre Stage as Gold Loses Momentum

Gold prices have been inching lower throughout April amid ongoing Macro and Geopolitical concerns in the Middle East. Markets are bracing for a prolonged disruption in supplies through Strait of Hormuz, as peace talks stall with a continued blockade in the crtical crude oil supply route. As of 11:50 am Singapore Standard Time, Gold futures trade at $4608 per ounce, almost flat, while Gold spot prices hover just below the mark of $4600 at $4595 per ounce.

Gold prices lost over 2.8% this week after news of Trump’s disatisfaction with Iran’s proposal for peace surfaced over the weekend. Technically, the COMEX Gold Futures has retreated from levels of $4800, which coincided with the 100DMA. If we plot a Fibonacci retracement between this year’s high and low, the next support on the downside is around the $4500 mark, followed by $4350, the 200DMA.

Despite persistent geopolitical tensions, Gold has struggled to extend gains as strength in the US dollar and expectations of steady interest rates continue to cap upside momentum. Markets are closely monitoring comments from Federal Reserve officials, with investors anticipating that elevated energy prices and inflation risks could delay potential rate cuts, thereby reducing the appeal of non-yielding assets such as Gold. However, underlying demand for Gold as a hedge against geopolitical instability and financial market uncertainty remains intact, suggesting that while near-term downside risks persist, broader macro uncertainty could continue to offer structural support to prices.

🛢️ Oil Markets Remain the Key Driver

 A recent WSJ report highlights President Trump’s instruction to extend the blockade in the Strait of Hormuz. Compared to a scenario where further escalation would mean economic pain to the United States or walking away from the conflict, Trump opted to continue squeezing Iran’s economy and oil exports by preventing shipping to and from its ports. What this means is that the flow of barrels from Hormuz could potentially remain disrupted for a prolonged period, a backdrop that could keep crude oil above the $100-a-barrel mark on a sustained basis.

Both benchmarks, the WTI and Brent, have added almost 50% since the war started and nearly 3% this week so far. However, we witnessed an intraday correction last evening after UAE officials announced their intention to part ways with OPEC, effective 1 May 2026. They backed their choice, citing national interest. With a price tag of $100 a barrel, Middle Eastern economies, whose GDPs depend heavily on crude oil exports, may be looking to cash in on the opportunity. Not merely GDP growth, this also presents an opportunity to build stronger trade relationships with ASEAN economies seeking a reliable fuel supply.

As of 10:05 am Singapore Standard Time, WTI futures trade at $100.08 per barrel, marginally up, while Brent futures inched up by +0.19% to 104.62 per barrel. For now, the UAE news has raised expectations that the country may increase output independently, easing fears of tight supply and weighing slightly on prices. While the US naval blockade is underpinning oil, the UAE news is extending a potential profit-taking opportunity.

Any confirmation of prolonged shipping disruptions could tighten supply expectations even further, reinforcing the upward bias in prices. Conversely, any diplomatic breakthrough or coordinated production response from major producers could trigger bouts of volatility, suggesting that while the broader trend remains bullish, near-term price action may continue to be punctuated by sharp intraday swings. Looking ahead, market attention is likely to remain fixated on supply-side developments and geopolitical signals emerging from the Gulf region.

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