Gold prices reversed lower following the Federal Open Market Committee (FOMC) meeting, as a stronger US Dollar and rising US Treasury yields negatively impacted market sentiment, according to OCBC strategist Christopher Wong [1]. The 2-year Treasury yield approached 4.75%, while the 10-year yield returned to around 5%, reinforcing the opportunity-cost channel and putting pressure on gold prices in the near term [1]. Wong notes that elevated yields and a firm Dollar may continue to cap gold's recovery prospects in the short run, but emphasizes that the Federal Reserve's outcome does not necessarily undermine gold's broader medium-term outlook, particularly if US economic data begin to soften [1].
From a technical perspective, gold was last seen at 4262, with mild bearish momentum persisting, although the drift lower in the Relative Strength Index (RSI) shows tentative signs of moderation [1]. Key support levels are identified at 4250, with further downside potential to 4000 and 3940 (2026 low) if this level is decisively broken. Resistance levels are noted at 4333 (100-day moving average) and 4431 (21-day moving average) [1].
Wong suggests that with a fairly hawkish rate path already priced in, any softening in US data could lead to lower yields and a weaker Dollar, which may eventually support gold prices again [1].
CONCLUSION
Gold's near-term outlook remains capped by elevated US yields and a strong Dollar, but the medium-term case for gold is intact if US data weaken. Technical levels suggest further downside risk if support is broken, though momentum indicators show some moderation. Market participants are watching for shifts in US economic data that could alter the current trend.