DBS Group Research’s Eugene Leow notes that Gold has stayed relatively stable despite conflicting geopolitical news, including a potential ceasefire and renewed threats around the Strait of Hormuz. He argues Gold remains in a corrective phase as elevated US real yields near 2% cap recovery potential, and expects range-bound trading around USD 4500-5000 with an upside bias, contingent on geopolitical developments and US Dollar weakness.

Corrective phase under yield headwinds

"Overnight, gold remained relatively stable despite conflicting geopolitical crosscurrents, balancing reports of a potential 45-day ceasefire against President Trump’s escalating threats to force the reopening of the Strait of Hormuz. More broadly, however, the metal remains entrenched in a corrective phase, weighed down by the persistent pressure of elevated US 10-year real yields that continue to hover near the 2% threshold."

"With the Middle East conflict yet to see any definitive de-escalation, the immediate outlook suggests a period of range-bound price action with an upside skew."

"However, any meaningful breakout remains heavily contingent on further geopolitical shifts."

"In the near term, gold is likely to oscillate within the USD 4500-5000."

"Until real yields undergo a meaningful retreat or the dollar exhibits sustained weakness, gold's recovery potential will remain structurally constrained."

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