Gold: Gains strengthen as Dollar softens – OCBC

Gold's Upward Momentum Amid Market Shifts

According to OCBC strategists Christopher Wong and Sim Moh Siong, gold has continued to rebound as both the US dollar and oil prices decline, and market confidence improves with indications that tensions in Iran may be easing. They observe that earlier, gold faced pressure due to asset sell-offs, reduced official sector purchases, and uncertainty surrounding the Federal Reserve. However, they anticipate renewed interest in gold, identifying support between 5105 and 5060, and resistance in the 5260 to 5315 range.

Key Technical Levels in Gold's Recovery

Gold's recent gains have coincided with a pullback in the dollar and oil, while investor sentiment has steadied on hopes of a resolution to the Iran situation.

The strategists suggest that the need for liquidity during recent market stress may have contributed to gold's earlier inability to break higher, as investors sold assets to raise cash.

Additional challenges for gold included the possibility of the Federal Reserve postponing its next rate cut, especially as higher oil prices could fuel inflation concerns in the US, alongside a slowdown in gold purchases by official institutions.

As the current phase of risk aversion fades, the strategists expect previous trends to reverse and gold demand to strengthen once again.

• Resistance: 5260, 5315
• Support: 5105 (21-day moving average), 5060

This report was generated with the assistance of artificial intelligence and subsequently reviewed by an editor.