OCBC’s strategists Sim Moh Siong and Christopher Wong turn more cautious on Gold in the near term, cutting its price forecasts as elevated Oil prices, higher yields and a more hawkish Federal Reserve (Fed) have weakened Gold’s backdrop. While ETF inflows are slowing and India’s higher import tariffs may weigh on demand, central bank diversification and portfolio hedging still underpin the medium-term outlook.

Near term pressure but anchors intact

“Gold softened in May as elevated oil prices and Hormuz disruption lifted yields, supported the USD and drove a more hawkish Fed repricing. This has limited gold’s safe-haven appeal, while ETF momentum has also slowed.”

“Near term, gold may need a better external backdrop to regain traction. Clearer US-Iran de-escalation, lower oil prices, softer yields and a more dovish Fed path India’s higher import tariffs may also weigh on physical demand at the margin. “

“Still, the medium-term anchor remains intact, supported by central bank diversification, strategic allocation demand and portfolio hedging.”

“We revised gold forecasts lower to reflect elevated oil prices for longer, hawkish Fed repricing and potential softness in India demand.”

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