Gold: Recovery toward 2027 despite near-term pressure - OCBC

OCBC strategists Sim Moh Siong and Christopher Wong remain constructive on Gold over the medium term but have lowered price forecasts to USD4,250/oz for end-2026 and USD4,710/oz for end-2027. Near-term challenges stem from softer risk sentiment, potential AI-related deleveraging and elevated US yields, while ETF inflows, central-bank buying and an eventual unwinding of Fed hawkishness support a recovery into 2027.

Medium-term bullish outlook despite near-term hurdles

"We remain constructive on gold over the medium term. But lowered forecast levels, now projecting gold at 4250 at end-2026 and 4710 at end-2027."

"Near-term conditions remain challenging amid softer risk sentiment, while weakness in AI-related equities could risk triggering broader deleveraging and liquidity-driven selling in gold."

"Fears of another Fed hike in December, which remains our house baseline, and the prospect of US rates staying restrictive for longer could keep yields elevated, raising the opportunity cost of holding gold."

"Nevertheless, ETF inflows and central-bank purchases continue to underpin underlying demand, while the recent positioning washout may allow long positions to rebuild from pre-breakout levels. Looking into 2027, an eventual unwinding of hawkish Fed expectations and moderation in USD strength and yields should provide support for gold’s recovery."

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