Gold: Rates shock weighs on metals – OCBC

LONDON (May 18) OCBC’s Christopher Wong reports sharp corrections in Gold and Silver as higher yields and a stronger Dollar overwhelmed safe-haven demand. Silver underperformed after a prior high-beta rally linked to industrial metals and AI-related risk appetite. With Gold near 4,540, Wong sees near-term downside risks unless yields stabilise or Oil and geopolitical drivers ease.

Non-yielding metals face downside risks

"Gold and silver corrected sharply into the weekend, with silver bearing the brunt of the move after a week of price swings. Overnight, gold fell nearly 2.5% toward the US$4,500/oz area, while silver slumped around 9% to below US$76/oz at one point."

"The pressure point was rates, elevated oil prices revived inflation concerns, pushed yields and the USD higher, and overwhelmed the safe-haven bid for non-yielding metals."

"Gold last seen at 4540 levels. Mild bullish momentum on daily chart faded while RSI fell. Risks skewed to the downside in the interim. Support at 4452 (23.6% fibo retracement of 2026 high to low), 4340 (200 DMA). Resistance at 4670 (21 DMA, 38.2% fibo), 4730 (50 DMA) and 4850 levels (50% fibo)."

"Overall, the tone remains fragile unless yields stabilise or oil/geopolitical risks stop feeding into a more hawkish rates repricing. More constructive steps towards the reopening of Strait of Hormuz may help to provide support."

FXStreet