Gold Navigates a Three-Way Squeeze as Singapore Takes on London, Iran Talks Progress, and the Fed Holds the Line

Gold trades near $4,317 as Singapore's gold clearing challenge, US-Iran diplomatic thaw, and hawkish Fed create opposing pressures; central bank buying provides support.

Gold is being pulled in opposing directions as a trio of structural shifts reshape its landscape. The yellow metal is contending with a bold infrastructure play out of Asia, tentative diplomatic progress in the Middle East, and a hawkish Federal Reserve that continues to cast a long shadow. Spot bullion traded at $4,317.80 an ounce early Thursday, a 1.4% bounce, while US gold futures slipped 1% to $4,339.30 — a split that hints at the market’s unresolved tension.

From a technical perspective, the metal remains on shaky ground. At current levels it sits roughly 22% below its 52-week high of $5,626.80 and nearly 24% beneath the all-time record set in late January. It is also trading below its 50-day moving average of around $4,578, with the relative strength index at 46 — neutral territory that signals the market has yet to find a clear direction.

Singapore is mounting the most direct challenge yet to London’s dominance in the global gold trade. The Singapore Exchange aims to launch a new over-the-counter clearing mechanism for physical gold by the end of 2026. Six major banks, including JPMorgan, Deutsche Bank, and DBS, have signed on as clearing members. The system will settle standard bars directly within the Asian time zone, allowing investors to bypass London for large transactions, cutting both time and settlement risk. From October 2026, Singapore will also offer custody services to foreign central banks. Hong Kong is reportedly developing a similar infrastructure project of its own.

Meanwhile, a diplomatic thaw between the US and Iran is adding a different kind of pressure. A 14-point memorandum has opened a 60-day negotiation window, the centerpiece of which is Iran’s agreement to allow tariff-free passage through the Strait of Hormuz. Full maritime capacity through the waterway is expected within 30 days. The prospect of a diminished oil supply shock reduces inflation fears and, by extension, the urgency to hold gold as a hedge. The deal has already dented some of the safe-haven demand that had supported prices.

Yet the biggest headwind remains monetary policy in Washington. The Federal Reserve has reiterated the possibility of another rate hike this year, with core inflation proving stubborn. Higher rates strengthen the dollar and push bond yields higher, two forces that typically weigh on non-yielding assets like gold. That dynamic has already triggered significant outflows from gold-backed ETFs. Over the past five trading sessions, $1.4 billion exited the SPDR Gold Shares fund alone, bringing year-to-date withdrawals to $7.7 billion.

State-led buying is providing a crucial floor under the market. While central bank demand has cooled slightly from its peaks, it remains elevated. Poland’s central bank added another 14 tonnes of gold in April, lifting its reserves to 595 tonnes. China’s central bank purchased 8 tonnes in the same month — its largest monthly acquisition since late 2024 and the 18th consecutive month of buying by Beijing. These sovereign purchases are helping to offset the retreat of speculative money and prevent a more severe correction.

All eyes now turn to Thursday’s US labor market data and the Philadelphia Fed index. A strong showing would give the Fed further ammunition to tighten, likely pushing gold lower. Conversely, any signs of softening could ease the rate-hike narrative. For the moment, the precious metal remains caught between a hawkish Fed, a tentative Iran detente, and an ambitious Singaporean makeover of the global gold clearing system.