OCBC’s Sim Moh Siong and Christopher Wong note Gold has retreated back toward USD 4,040/4,050 after briefly trading above 4,160 as Brent surged past USD100 and the Dollar and US yields climbed. They say Gold’s tentative recoupling with geopolitical risk remains fragile, with the metal still trading mainly through the Oil and rates channel and facing two-way risks around nearby support and resistance.

Geopolitics outweighed by Oil and yields

"Gold was unable to sustain its recent rebound, falling back toward 4040/50 levels after briefly trading above 4160 in the previous session."

"Gold fell back toward 4,040/50 levels as Brent broke above USD100 and both the USD and US yields moved higher, suggesting its tentative recoupling with geopolitical risk was not yet durable."

"Rather than benefiting from the renewed geopolitical risk, gold once again traded through the oil/rates channel."

"Losses were also broad-based across the precious metals complex, as silver, platinum and palladium fell. The reversal suggests the earlier signs of gold recoupling with geopolitical risk were not yet durable, with the metal remaining sensitive to further increases in oil, yields and rate expectations."

"Mild bullish momentum on daily chart intact but RSI fell. 2-way risks. Resistance at 4070 (21 DMA), 4167. Support at 4000, 3960 levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)