Gold: Higher yields cap recovery prospects – OCBC

OCBC strategist Christopher Wong reports that Gold reversed lower after the FOMC as a stronger US Dollar (USD) and rising United States (US) yields weighed on sentiment, with the 2-year near 4.75% and the 10-year around 5%. He argues elevated yields and a firm Dollar may cap Gold in the near term, but says the Fed outcome does not undermine Gold’s broader medium-term case, especially if US data soften.

Near-term capped, medium-term case intact

"Gold reversed lower after the FOMC as the stronger USD and rise in UST yields weighed on sentiment. The 2y yield came close to 4.75% while the 10y returned to around 5%, keeping the opportunity-cost channel firmly in focus."

"Near term, elevated yields and a firmer USD may continue to cap gold, but the Fed outcome does not necessarily undermine the broader mediumterm case. With a fairly hawkish rate path already in the price, softer US data could pull yields and the dollar lower again."

"Support at 4250 if broken decisively, may point to some downside pressure in the interim. Next support at 4000, 3940 (2026 low). Resistance at 4333 (100 DMA), 4431 (21 DMA)."

"Gold last seen at 4262 levels. Mild bearish momentum intact while drift lower in RSI shows tentative signs of moderation."