OCBC strategists Sim Moh Siong and Christopher Wong attribute gold’s pullback towards $5,015/oz to liquidity needs and profit-taking, rather than weaker fundamentals. The bank emphasizes that geopolitical tensions may force investors to sell gold for cash, but continued uncertainty tends to support safe-haven demand in the event of declines. OCBC sees two-way trading with clearly defined support and resistance levels.
Selling liquidity is a demand paradise
“Yesterday’s return to $5,015/oz in early trading despite escalating geopolitical tensions likely reflects liquidity dynamics rather than a change in fundamentals.”
“The sharp rise in oil prices towards $110/bbl also raised inflation concerns and delayed the Fed’s easing of monetary policy, partially strengthening the USD and triggering profit-taking in gold.”
“During periods of geopolitical market stress, investors sometimes sell assets such as gold to raise cash.”
“Once this phase has passed, geopolitical uncertainty typically continues to support safe-haven demand during downturns.”
“Gold partially recovered from earlier losses as broader risk sentiment improved with oil prices falling from multi-month highs.”
“Support at $5,096/oz (21 DMA), $5,010/oz. Resistance at $5,200/oz, $5,260/oz.”
(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)
