In a significant market shift, gold and silver prices have experienced sharp corrections, primarily driven by rising yields and a strengthening dollar that have overshadowed the traditional safe-haven appeal of these metals. According to Christopher Wong from OCBC, silver, in particular, has seen considerable underperformance following a prior high-beta rally correlated with industrial metals and increasing risk appetite linked to artificial intelligence developments.
Gold has seen its price dip nearly 2.5%, approaching the US$4,500 per ounce mark, while silver plummeted around 9%, with prices briefly falling below US$76 per ounce. This downturn follows a turbulent week for both metals, characterized by notable price volatility.
The primary catalyst behind this decline appears to be the elevated interest rates, compounded by rising oil prices that have reignited concerns over inflation. These factors have led to higher yields and bolstered the dollar, ultimately diminishing the safe-haven demand that typically benefits gold and silver during turbulent economic times.
Currently, gold is priced around US$4,540 per ounce. Wong notes that the bullish momentum observed on the daily chart has faded, with the relative strength index (RSI) also reflecting growing downward risks in the short term. He highlights crucial support levels for gold at US$4,452, which marks a 23.6% Fibonacci retracement of the 2026 high to low, and US$4,340 at the 200-day moving average. Resistance levels could come into play at US$4,670, US$4,730, and US$4,850, corresponding to various Fibonacci retracement and moving average metrics.
The overall sentiment in the market remains fragile, hinging on whether yields stabilize or if volatility in oil prices and geopolitical risks continues to exert pressure on interest rates. Observers speculate that any constructive steps toward the reopening of strategic areas such as the Strait of Hormuz could serve as a stabilizing factor for the current market dynamics.
