Gold: Pullback Risk Grows as Yields Rise and Oil Retreats — OCBC

Spot gold is currently trading near $4,358.9193, with the recent rebound momentum facing a test. OCBC FX strategists Shen Moxiong and Huang Junneng noted that as crude oil prices resume their uptrend and US long-term yields move higher, concerns over inflation have reignited, stripping gold's rebound of sustained momentum. On the technical front, bullish momentum on the daily chart is fading, and the Relative Strength Index has pulled back from near-overbought levels, suggesting further downside correction risk for gold prices in the near term.

**Yields and Dollar Form Dual Pressure**

Recent market expectations for the US rate path have been revised higher, keeping real yields elevated, which exerts significant pressure on non-yielding assets like gold. OCBC's analysis shows that gold's sharp correction in March was driven not by deteriorating fundamentals but by a hawkish shift in market expectations for Fed rates, compounded by the unwinding of crowded positions. The bank even draws parallels between the current environment and the 2013 "taper tantrum," when a surge in real yields triggered a major gold selloff. Although geopolitical uncertainty remains elevated, shifting rate expectations have pushed real yields and the US dollar higher, a combination that is typically unfavorable for gold.

**Long-Term Structural Support Coexists with Short-Term Headwinds**

Despite near-term pressures, OCBC still emphasizes that gold's medium-term outlook is underpinned by structural factors, including central bank diversification, geopolitical uncertainty, and portfolio hedging demand. The bank projects gold's average price to rise to $4,180 per ounce by September 2026 and further to $4,820 by September 2027. However, it also warns that these structural drivers may not be sufficient to offset short-term headwinds from elevated real yields and slowing ETF inflows. Softer US inflation data or weak labor market figures could improve the precious metal's outlook; conversely, persistently resilient economic data and sticky inflation could keep real yields elevated, delaying a sustained recovery in gold prices.