Gold Price Slips on Inflation Concerns as Bitcoin ETF Flows Diverge

Key Insights

• Gold price pulled back after Donald Trump announced a blockade of the Strait of Hormuz.
• Crude oil prices jumped above $100, raising significant inflation risks.
• Top gold ETFs like GLD and IAU have shed billions in assets this year.

Gold price slipped by 0.75% on Monday morning as investors reacted to President Donald Trump’s blockade of the Strait of Hormuz. It also slipped as gold ETFs experienced substantial outflows and as the Turkish Central Bank sold to cushion the lira.

Gold Price Falls Amid Elevated Inflation Fears

Gold and other top global assets, including Asian stock indices such as the Nikkei 225 and Hang Seng, dropped amid fears of global inflation.

A report published by the Bureau of Labor Statistics (BLS) on Friday showed the US inflation surged in March as the Iran war continued. The headline Consumer Price Index (CPI l) rose 3.3% in March, its highest level since 2024.

This trend may continue now that President Donald Trump has announced a naval blockade of the Strait of Hormuz, which will reduce the amount of oil, fertilizer, and helium coming from the Gulf region. As a result, crude oil prices jumped to over $100 on Monday.

Oil prices may continue rising in the near term due to the elevated risk that the ceasefire will break and that more intense fighting will return.

With the blockade remaining, Iran will likely focus on disrupting oil transit through the Red Sea by bombing a large Saudi Arabian pipeline that is shipping over 7 million barrels of oil per day. It may also leverage Yemen’s Ansah Allah, commonly known as Houthis to prevent oil shipments through the Red Sea.

The implication is that US inflation will keep rising, preventing the Federal Reserve from cutting interest rates, which often boosts gold prices.

A Polymarket poll shows that most traders believe that the Fed will not cut interest rates this year. Before the war started, most traders and economists expected the bank to deliver three cuts this year, as the labor market was struggling and consumer inflation was moving downward.

Trump’s hope is that Kevin Warsh, his nominee, will convince the other officials that concerns of the labor market are much greater than inflation.

How many Fed rate cuts in 2026 | Source: Polymarket

Top Gold ETFs Are Having Substantial Outflows as Bitcoin Funds Have Added Assets

Gold price also slipped as third-party data shows that American investors are selling their gold assets to book profits after the strong rally that pushed it to a record high earlier this year.

Data compiled by ETF.com shows the popular SPDR Gold Shares Trust (GLD) experienced outflows of over $269 million last week, bringing cumulative net outflows this year to over $3.1 billion.

Similarly, the iShares Gold Trust (IAU) has lost over $1.86 billion in assets this year. Instead, investors have moved to the equity market, where top ETFs like VOO and SPYM have added over $60 billion this year. Bitcoin ETFs have also experienced inflows March and April.

Meanwhile, the Central Bank of the Republic of Turkey (CBRT) has dumped billions in gold to stabilize the Turkish lira and fund relatively high energy imports amid the war.

Gold Price Forecast: Technical Analysis

The daily chart shows that gold price has been attempting to rebound in the past few weeks. It has risen from the year-to-date low of $4,090 on March 23rd to $4,718 today.

However, gold has formed a rising wedge pattern, a pattern composed of two converging trendlines. It has now moved below the lower side of this pattern.

Gold also remains below the 50-day Exponential Moving Average (EMA), which has provided it with strong resistance.

Therefore, the most likely gold price forecast is bearish, with the key target to watch at $4,400, which coincides with the February low this year.

A jump above the important resistance level at $4,860 will invalidate the bearish outlook and point to further gains towards the $5,000 resistance.

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