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Gold stays sluggish as long-end yields and the US dollar rise

OCBC strategists say a sustained drop in real and long-end Treasury yields, along with a weaker dollar, is the cleaner catalyst for gold to recover.

Reported · Written up by our desk · Major Pairs

OCBC strategists Sim Moh Siong and Christopher Wong said gold has been sluggish, even after October Fed hike expectations pulled back sharply, because long-end US Treasury yields have resumed rising and the US dollar has remained firm, according to an FXStreet write-up.

They argued that easing Fed hike risk on its own is not enough for a sustained recovery in gold, stressing that investors would likely need a more durable decline in real yields and the dollar for gold to turn higher.

The strategists pointed to ongoing inflation concerns, citing that oil stayed elevated while an ISM prices index rose further, and they said gold was last around the 4,140 level.

They added that gold’s mild bearish momentum remains intact on the daily chart, with RSI flat, and they are watching for potential breakout signals from compression in moving averages, FXStreet reported.

Latest closeGold $4,150.40 ▼0.3%

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