Key Moments
- Gold has been extending its recovery as the USD and oil prices move lower and risk sentiment shows tentative stabilization.
- Previous pressure on gold was linked to asset liquidation, slower official sector purchases, and uncertainty around the Fed’s next rate cut.
- OCBC strategists identify support at 5105-5060 and resistance at 5260-5315 as key technical levels for gold.
Strategists See Ongoing Rebound in Gold
OCBC strategists Christopher Wong and Sim Moh Siong report that gold’s rebound has continued as the Dollar weakens and oil prices ease, while risk appetite steadies amid indications that the conflict in Iran may be approaching a conclusion.
According to their analysis, earlier market stress had driven investors to liquidate assets to bolster cash positions, which had been one reason gold struggled to push decisively higher.
Factors Previously Weighing on Gold
The strategists point to several elements that had been acting as headwinds for the metal. These include concerns that the Federal Reserve might slow or postpone its next interest rate cut, given that higher oil prices could fuel inflation risks in the United States. They also flag a moderation in gold buying by the official sector as another factor that had dampened momentum.
They suggest that once the current phase of flight-to-safety behavior runs its course, earlier market moves are expected to reverse, creating room for gold demand to rebuild.
Key Technical Levels: Support and Resistance
Wong and Sim outline clearly defined price levels that they are monitoring for gold, noting that these zones are likely to guide trading behavior as the recovery unfolds.
| Level Type | Price Zone | Comments |
|---|---|---|
| Support | 5105 | Identified as the 21 DMA (21-day moving average) |
| Support | 5060 | Secondary support level |
| Resistance | 5260 | Initial resistance area |
| Resistance | 5315 | Higher resistance zone |
Unchanged Direct Commentary from OCBC
“Gold extended its recovery as USD and oil prices retraced lower while risk sentiment tentatively stabilised on signs that the conflict in Iran may possibly be near its end.”
“Price action was also consistent with our posturing that asset liquidation to raise cash during market stresses may have partially explained why gold struggled to break out.”
“Other factors that had weighed on gold are the risk of Fed slowing or delaying next rate cut as rising oil prices may stoke potential inflationary risks for US while gold purchase momentum in the official sector slowed.”
“When this phase of flight to safety passes, prior moves should unwind and demand for gold is likely to return.”
“Resistance at 5260, 5315 levels. Support at 5105 (21 DMA), 5060 levels.”
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