Gold prices have shown tentative signs of stabilisation following a sharp selloff, with the precious metal last seen trading at USD 4,028. This recovery above the USD 4,000 mark indicates some dip-buying interest, supported by easing pressures from the US Dollar and real yields, as well as a slight reduction in expectations for further Federal Reserve tightening [1]. OCBC FX strategists Sim Moh Siong and Christopher Wong emphasize that the broader market setup remains fragile, noting that rallies are likely to fade unless real yields decline further, Fed hike expectations unwind, and ETF/investor liquidation stabilises [1].
The recent selloff in gold was attributed to a renewed correlation with real yields and hawkish Fed pricing. Daily momentum for gold remains mildly bearish, although the decline in RSI is showing signs of slowing near oversold conditions, suggesting some stabilization but not a confirmed bullish reversal [1]. Key technical levels include support at 3,960 and 3,820 (76.4% Fibonacci retracement of August low to 2026 high), and resistance at 4,100, 4,160 (61.8% Fibonacci), and 4,280 (21 DMA) [1].
OCBC strategists caution that for gold to regain more durable upside traction, there needs to be a clearer easing in real yields, a further unwinding of Fed hike expectations, and stabilization in ETF/investor liquidation. Until these conditions are met, the near-term outlook is for stabilization rather than a confirmed bullish reversal [1].
CONCLUSION
Gold has rebounded above the $4,000 level, signaling tentative stabilization after a sharp decline. However, OCBC strategists warn that the market structure remains fragile, and a sustained recovery will depend on further easing in real yields and Fed expectations. The current outlook is for stabilization, not a confirmed reversal, with technical levels providing guidance for near-term price action.