Gold: Cautious near term outlook – OCBC
OCBC strategists Christopher Wong and Sim Moh Siong highlight renewed weakness in Gold despite falling US Treasury yields and rising geopolitical risks. They note that surging Oil prices are reviving inflation concerns and expectations of prolonged restrictive Fed policy, weighing on Gold. They remains cautious, saying easing Oil prices, lower real yields and a better price response are needed…
OCBC analysts, Christopher Wong and Sim Moh Siong, have expressed cautious optimism about the outlook for gold in the short term. Despite falling US Treasury yields and increased geopolitical risks, gold has shown renewed weakness. This trend is attributed to surging oil prices, which are reigniting concerns about inflation and expectations of a prolonged restrictive policy from the Federal Reserve.
Wong and Sim suggest that easing oil prices, lower real yields, and a better price response are necessary conditions for gold to regain momentum near term. They note that despite US Treasury yields falling dramatically due to the tech selloff, gold has continued to decline, indicating a fragile near-term sentiment.
The analysts believe that an easing in oil prices and a further decline in real yields could help stabilize gold. However, they caution that they would need to see a better price response before becoming more optimistic. Support levels are identified at 4000 and 3943, while resistance is noted at 4080 and 4156, corresponding to the 21-day moving average.
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