Gold: Near term capped, medium term constructive – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong report that Gold has come under pressure as rising global yields, higher real rates and renewed inflation concerns reduce expectations for near-term Fed cuts. ETF outflows and stress-driven liquidation are adding to downside. Nonetheless, Their forecasts and commentary maintain a constructive medium-term outlook, with Gold expected to resume its uptrend despite choppy trading.

Yields weigh but structure still supportive

"Gold prices fell sharply as rising global yields and renewed inflation risks—driven by higher energy prices—reduced expectations for near-term rate cuts. Investors continued to pare back gold-backed ETF holdings, adding to the downside."

"The metal has also been prone to bouts of liquidation during periods of market stress, even as geopolitical uncertainties remain elevated."

"The market is trading less on geopolitical hedging flows and more on fears that stickier inflation could prompt a more hawkish central bank stance."

"Rising energy prices and fading Fed cut expectations strengthen real yields and the USD, pressuring gold. "

"Despite the near‑term pressure, the broader structural backdrop remains supportive. We still expect gold to resume its medium‑term uptrend, though prices may struggle for sustained momentum in the near term, with trading likely to stay choppy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)