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OCBC Analysts Highlight Gold Price Dynamics Amid Geopolitical Uncertainty
According to OCBC strategists Sim Moh Siong and Christopher Wong, gold prices have seen a rebound in volatile trading conditions, influenced by a tenuous ceasefire between the US and Iran, along with direct discussions occurring between Israel and Lebanon. With both nominal and real yields in the US declining, coupled with a general uptick in risk sentiment, the bank suggests that potential upward momentum for gold prices might be more likely.
Geopolitical Factors and Market Sentiment
The recent fluctuations in gold can be attributed to several geopolitical developments. The fragile ceasefire between the US and Iran, alongside ongoing talks between Israel and Lebanon, has provided a spark of optimism in the market. While geopolitical news has the potential to sway market dynamics in either direction, there appears to be a prevailing tendency towards increased risk appetite. This is evident as various asset classes—including equities, high-beta currencies, and gold—seem to be moving in synchronisation.
Recent shifts in the US bond market, where both nominal and real yields have decreased, are also seen as beneficial for gold prices. A lower yield environment typically enhances the appeal of non-yielding assets like gold.
Key Levels for Gold Prices
The next critical resistance levels for gold are identified at 4850, which aligns with a 50% Fibonacci retracement level from its 2026 peak to its low, followed by 4915 (the 50-day moving average) and 5023. Conversely, support levels are set at 4670 and 4250, indicating points where prices may encounter buying interest.
Looking Ahead
The trajectory of gold prices in the near term will largely hinge on the durability of the ceasefire and whether a decline in oil prices can create an environment conducive to dovish adjustments from the Federal Reserve. Should these factors align favourably, there is potential for further upward movement in gold prices.
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