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OCBC strategists Sim Moh Siong and Christopher Wong analyze Gold's recent rebound, attributing it to technical factors following a 20% decline triggered by the Iran conflict. They highlight that the rally lacks fundamental support, with rising U.S. Treasury yields and a stronger dollar posing significant headwinds. The analysts note that while technical indicators may temporarily buoy prices, sustained recovery depends on resolving geopolitical tensions and a reversal in yield trends.
For markets, the report underscores the fragile balance between technical trading and macroeconomic pressures. Traders should monitor central bank policies, particularly the Federal Reserve's stance on interest rates, as well as developments in the Middle East. A breakdown below key support levels could reignite selling pressure, while a sustained rebound above resistance might signal renewed investor confidence.
The implications for global investors are twofold: short-term volatility is likely due to conflicting technical and fundamental forces, and long-term positioning hinges on geopolitical stability and monetary policy shifts. Key watchpoints include the Fed's next rate decision, Iran-U.S. relations, and the U.S. dollar index. Gold's performance will serve as a barometer for risk appetite and safe-haven demand.
