Gold: Breakout extends as yields ease – OCBC

OCBC’s Christopher Wong and Sim Moh Siong highlight a sharp rebound in Gold as easing Middle East tensions weighed on Oil and US Treasury yields, softening the US Dollar. Technical buying and short covering accelerated once resistance broke, while central bank demand from the Bank of Korea added support. Near-term momentum is mildly bullish, with key resistance at 4333 and 4393 and support at 4160 and 4077.

Gold breakout on softer yields

"Gold rose sharply overnight as easing Middle East tensions drove oil prices lower while US Treasury yields and USD eased. Market expectations for Fed to hike in Sep has eased. About 55% probability priced (vs. 66% a week ago). The sharp move in gold accelerated after prices cleared recent resistance, triggering technical buying and short covering."

"Gold’s strength suggests investors are increasingly pricing a de-escalation of the US-Iran conflict, a normalisation of oil flows through the Strait of Hormuz, lower real interest rates and a softer USD."

"News that the Bank of Korea is preparing to purchase domestically produced gold for the first time in 13 years and that they had recently begun buying gold ETF may also have provided a modest sentiment boost, although the scale and timing of its purchases remain unclear."

"Near-term momentum has improved, with Friday’s upcoming US payrolls report now key to whether the decline in yields, USD and gold’s breakout can be sustained."

"Daily momentum is mild bullish while RSI rose to near overbought conditions. Resistance at 4333 (23.6% fibo retracement of 2026 high to low), 4393 (100 DMA). Support at 4160 (50 DMA), 4077 (21 DMA)."

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