Gold: Near term capped, medium term constructive – OCBC

💡 DMK Insight

Gold’s recent pressure is a wake-up call for traders: rising yields and inflation fears are shifting the landscape. With global yields climbing and real rates on the rise, the Fed’s potential for cuts seems increasingly distant. This environment typically weighs on gold, as higher yields make non-yielding assets less attractive. The ETF outflows signal a lack of confidence among investors, indicating that many are reallocating to assets perceived as safer or more profitable in the current climate. Traders should keep an eye on the $1,800 support level; a breach could lead to further downside, while a bounce might suggest a temporary reprieve. But here’s the flip side: if inflation continues to surprise to the upside, we could see a renewed interest in gold as a hedge. Watch for any shifts in inflation data or Fed commentary that could change the narrative. In the meantime, monitor ETF flows closely, as they can provide insight into market sentiment and potential reversals.