Gold Consolidation and Market Sentiment: Insights from OCBC Strategists
OCBC strategists, Sim Moh Siong and Christopher Wong, have noted that gold continues to be closely linked to risk appetite, with recent geopolitical developments impacting market sentiments. They suggest that gold is likely to experience consolidation in the near term, with key resistance levels identified between 4,850 and 4,900, while support is seen at approximately 4,714 and 4,650 to 4,670.
Recent geopolitical events, particularly over the weekend, have negatively influenced risk sentiment, which is expected to affect gold prices. As gold trades in response to these risk proxies, the analysts emphasise a strategy of buying on dips rather than pursuing rallies.
Market Dynamics and Technical Analysis
Gold prices saw a surge, reaching as high as 4,889, largely driven by reports of the Strait of Hormuz reopening. However, this increase was followed by a retracement as the New York trading session concluded. The daily chart for gold maintains a bullish momentum, although the Relative Strength Index (RSI) remains relatively flat, indicating a period of consolidation ahead.
The analysts have identified several critical levels for traders to monitor:
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Resistance Levels:
- 4,850 – aligning with the 50% Fibonacci retracement of the 2026 high to the low.
- 4,900 – corresponding to the 50-day moving average (DMA).
- Support Levels:
- 4,714 – matching the 100-day moving average (DMA).
- 4,650/4,670 – reflecting the 21-day and 38.2% Fibonacci retracement levels.
OCBC’s strategists reiterate that gold’s near-term performance will largely hinge on broader risk sentiment and the outcomes of ongoing ceasefire discussions. This situation strengthens their recommendation to adopt a dip-buying strategy instead of chasing price rallies.
In summary, while bullish trends in gold persist, market participants are advised to exercise caution, focusing on strategic entry points during price dips due to the high volatility stemming from geopolitical tensions.
This analysis was supported by an artificial intelligence tool and subsequently reviewed by an editor.
