Gold: Stabilisation not confirmed reversal – OCBC

OCBC’s FX strategists Sim Moh Siong and Christopher Wong note Gold is tentatively stabilising after a sharp selloff, with prices back above USD4,000 and some dip-buying interest emerging as Dollar and real yield pressures ease. However, they stress the broader setup remains fragile, with rallies likely to fade unless real yields fall, Fed hike expectations unwind and ETF/investor liquidation stabilises, despite nearby support and resistance levels.

Tentative base but fragile structure

"Gold is showing tentative signs of stabilisation after the sharp decline, but a durable rebound still requires a friendlier rates backdrop. The recovery back above the USD4,000 level suggests some dip-buying interest is emerging after the recent washout, helped by some easing in USD and real yield pressure while Fed tightening expectation also pared back slightly."

"But the broader setup remains fragile. The recent episode of selloff has been driven by a renewed recoupling with real yields and hawkish Fed pricing."

"As long as markets continue to price a meaningful risk of Fed tightening, rallies may remain prone to fading. For gold to regain more durable upside traction, real yields need to ease more clearly, Fed hike expectations need to unwind, and ETF/investor liquidation needs to stabilise."

"Until then, the near-term read is stabilisation, not yet a confirmed bullish reversal. Gold last seen at 4028 levels. Daily momentum remains mild bearish while decline in RSI showed some signs of slowing near oversold conditions."

"Support at 3960, 3820 levels (76.4% fibo retracement of Aug low to 2026 high). Resistance at 4100, 4160 (61.8% fibo) and 4280 (21 DMA)."

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