Gold prices were hovering just above the key $5,000 level as attention turned to the Federal Reserve and its ongoing policy meeting. The Fed is facing a difficult situation: sharply rising oil prices due to the Iran conflict are increasing inflation risks, while slowing consumer spending suggests the economy may need support. A drop below $5,000 would be both technically and psychologically negative for gold, and pressures are building in that direction. Although geopolitical tensions usually push gold higher, that trend is being overridden. The conflict has driven inflation higher, forcing the Fed to stay hawkish — and a hawkish stance is typically negative for gold. Concerns over supply disruptions in the Strait of Hormuz have pushed inflation expectations higher, reducing hopes for rate cuts in 2026. As a result, Treasury yields remain elevated, strengthening the US dollar and limiting gold’s upside. Ironically, the same crisis that should support gold is instead keeping it under pressure by boosting the dollar. Markets widely expect the Fed to hold interest rates steady, but the real focus is on future projections. If inflation forecasts rise and expected rate cuts are delayed further, it could extend the dollar’s strength and keep pressure on gold. Meanwhile, the situation in the Strait remains unstable. While the White House suggests some tanker movement has resumed, access appears tightly controlled by Iran, likely being used as leverage in negotiations with oil-dependent nations. At the same time, the conflict is intensifying, with attacks on energy infrastructure and rising oil prices, reversing earlier market optimism. Technically, gold has broken below a key chart pattern and is now testing support near $5,000. A breakdown could push prices toward $4,915, while strong buying could trigger a rebound toward $5,200–$5,300. Despite short-term weakness, gold has underlying support from central bank demand. Countries like Uganda are increasing gold reserves as part of a broader move away from reliance on the US dollar. This trend provides a longer-term base for prices. For gold to rise meaningfully in the near term, either the Fed would need to take a more dovish stance — which seems unlikely — or oil prices would need to fall significantly due to a real easing of tensions. Neither scenario appears likely right now. Until then, gold is expected to remain around the $5,000 level — under pressure in the short term but supported by long-term demand.