Gold: Technical rebound faces yield headwinds – OCBC

💡 DMK Insight

Gold’s recent bounce is a technical rebound, but here’s why traders should be cautious: After a nearly 20% drop linked to geopolitical tensions from the Iran conflict, this uptick might not signal a sustainable recovery. Traders often react to such drawdowns with short-covering rallies, but the underlying fundamentals—like inflation and interest rate expectations—still loom large. If inflation continues to rise, central banks may tighten policies, which could further pressure gold prices. Watch for resistance around key levels; if gold can’t hold above recent highs, it might be a false breakout. On the flip side, if geopolitical tensions escalate, that could drive safe-haven demand back into gold. Keep an eye on the daily chart for patterns; a failure to break above certain resistance points could signal a return to bearish sentiment. For now, monitor the $1,800 level closely—if it holds, it could indicate a stronger bullish case, but if it breaks, expect more downside risk.