Gold: Despite near-term pressure, recovery towards 2027 expected - OCBC

Gold faces near-term pressure from softer risk sentiment, possible AI-related deleveraging and elevated US yields, although OCBC strategists Sim Moh Siong and Christopher Wong retain a constructive medium-term view. They have cut their price forecasts to USD4,250/oz for end-2026 and USD4,710/oz for end-2027. A recovery into 2027 is supported by ETF inflows, central-bank purchases and an eventual unwinding of the Fed’s hawkish stance.

Can Gold’s medium-term bullish outlook withstand near-term challenges?

"We remain constructive on gold over the medium term. But lowered forecast levels, now projecting gold at 4250 at end-2026 and 4710 at end-2027."

"Near-term conditions remain challenging amid softer risk sentiment, while weakness in AI-related equities could risk triggering broader deleveraging and liquidity-driven selling in gold."

"Fears of another Fed hike in December, which remains our house baseline, and the prospect of US rates staying restrictive for longer could keep yields elevated, raising the opportunity cost of holding gold."

"Nevertheless, ETF inflows and central-bank purchases continue to underpin underlying demand, while the recent positioning washout may allow long positions to rebuild from pre-breakout levels. Looking into 2027, an eventual unwinding of hawkish Fed expectations and moderation in USD strength and yields should provide support for gold’s recovery."

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