Gold Finds Footing on Iran Truce and Soft GDP, But China's Appetite Provides the Floor

Chinese gold imports surged 81% in April, signaling strong physical demand. Gold bounced on US-Iran ceasefire and weak GDP, but faces macro headwinds.

Chinese gold imports surged in April, signaling robust physical demand that is providing a bedrock for bullion even as macroeconomic headwinds persist. Net imports via Hong Kong jumped 81.2% from March to 86.7 tonnes, with total inflows reaching nearly 99.3 tonnes. The People’s Bank of China added to its reserves for the 18th consecutive month, bringing official holdings to 2,322 tonnes. Yet gold’s price has been anything but serene, oscillating between macro-driven selloffs and tactical rebounds.

The latest bounce came on Friday after reports of a tentative 60-day ceasefire between the US and Iran. The Memorandum of Understanding includes reopening the Strait of Hormuz and a 30-day mine-clearing operation — strategic moves for global oil flows. Paradoxically, while gold typically gains on geopolitical escalation, this time the market welcomed the prospect of stable trade routes, but the deal’s uncertainty — Trump has yet to sign — keeps a floor under safe-haven demand.

Compounding the positive catalyst were US data that weakened the case for rate hikes. First-quarter GDP was revised down to 1.6% from 2.0%, and core PCE inflation rose only 0.2% month-on-month in April. The probability of a Federal Reserve rate hike dropped to around 45%, pushing the dollar index off its seven-week high to near 99.00. Lower bond yield expectations enhance gold’s relative appeal.

The recovery masks a tough period. Gold is heading for its third consecutive monthly decline, down about 2.2% in May and roughly 15% over three months. Technically, the 200-day EMA around $4,399 provided support, triggering a bounce. Friday’s move above $4,500 recouped some losses, but the metal remains 16.7% below its 52-week high of $5,450 from January 2026. At the close on Thursday, spot gold stood at $4,538.

The tug-of-war between physical strength and macro pressure is likely to persist. Central banks continue to diversify reserves, and China’s appetite shows no sign of abating. But until the Fed signals a policy pivot or geopolitical risks escalate further, gold may struggle to regain its highs. Volatility is expected to remain elevated, with some Fed officials still sounding hawkish and profit-taking possible after the latest surge.