Gold prices remained stable in early Asian trading after a 2.4% plunge in front-month Comex futures overnight, signaling a potential technical recovery, according to Wall Street Journal Markets. Spot gold closed near $4,520.47 per ounce, with traders balancing cautious optimism about rebound signals against lingering macroeconomic headwinds. Paolo Broccardo, CEO of BankPro, warned that persistent inflation from elevated oil prices could drive U.S. Treasury yields higher, pressuring non-yielding assets like gold. He cited ongoing disruptions in the Strait of Hormuz as a key risk, noting efforts to reopen the waterway had yet to quell volatility.

The analyst linked rising oil costs to broader inflationary pressures, which central banks may counter with tighter monetary policy. This dynamic creates a tug-of-war: higher yields typically hurt gold, but sustained geopolitical tensions could justify its safe-haven appeal. Broccardo emphasized that investors must weigh these conflicting forces before making strategic moves, as technical indicators suggest short-term stabilization but long-term uncertainty remains.

Market participants are monitoring Comex futures for signs of sustained momentum, though Broccardo cautioned against overreaction. “Critical figures like the $4,520 psychological level will likely attract attention,” he said, though he stopped short of predicting a bullish breakout. The Strait of Hormuz remains a wildcard, with any escalation threatening to spike oil prices and reignite inflation fears.

Why this matters: Gold’s resilience amid technical weakness highlights its role as a hedge against systemic risks, even as central banks prepare for rate hikes. The Strait of Hormuz tensions and oil price linkages underscore gold’s sensitivity to energy-driven inflation, a factor investors cannot ignore. For now, spot gold’s consolidation around $4,520 reflects a market in limbo—neither fully rallying nor collapsing.