Gold: Rebound on softer Fed expectations – OCBC
OCBC’s Christopher Wong reports Gold rebounded over 2% towards 4510 as Waller’s comments led markets to pare September Fed hike expectations, lowering UST yields and the Dollar.
OCBC analyst Christopher Wong reported gold rebounded over 2% towards 4510 as Waller's comments reduced markets' expectations of a September Fed hike, leading to lower UST yields and the dollar. Wong remains optimistic, but warns that near-term direction will depend on Fed reprioritization, with upcoming economic data such as payrolls, CPI, and PPI crucial.
Geopolitical tensions provide minor support, while rising oil prices introduce a two-sided inflation risk. Gold surged more than 2% to its intra-session high of 4510 after Waller's remarks prompted a decrease in Fed hike expectations, causing UST yields and the USD to fall. This rebound follows a sharp sell-off earlier in the week due to Warsh's Jackson Hole remarks and increased global yields negatively impacting precious metals.
The market remains constructive, but near-term direction is likely to be highly sensitive to Fed reprioritization. Payrolls tonight could drive the next move in yields and the USD, while next week's CPI and PPI will be more decisive in determining if the recent disinflation trend is enough to keep the Fed on hold. Geopolitical tensions remain slightly supportive, but higher oil prices are a double-edged risk, potentially feeding into inflation expectations and yields.
Gold closed at 4474 levels, exhibiting mild bearish momentum on the daily chart while the RSI increased. Gold faces both risks with a bias to buy dips. Immediate resistance lies at 4520/30 levels (200 DMA, 23.6% fibo retracement of 2026 low to Aug high). A decisive break may open the door for gold to attempt another climb towards 4700 levels. Support is found at 4410 (38.2% fibo) and 4360 (100 DMA).
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
