OCBC’s Christopher Wong reports Gold rebounded over 2% towards 4510 as Waller’s comments led markets to pare September Fed hike expectations, lowering UST yields and the Dollar. Wong remains constructive but notes near-term direction will hinge on Fed repricing, with upcoming payrolls, Consumer Price Index (CPI) and Producer Price Index (PPI) key. Geopolitical tensions are marginally supportive, while higher Oil poses a two-sided inflation risk.

Constructive but data-sensitive gold outlook

“Gold rose more than 2% towards 4510 intra-session high as Waller’s comments prompted markets to pare Sept Fed hike expectations, pulling UST yields and the USD lower.”

“The rebound partly reverses the sharp sell-off earlier in the week, when Warsh’s Jackson Hole remarks and the rise in global yields had weighed on precious metals.”

“We remain constructive, although near-term direction is likely to stay highly sensitive to Fed repricing. Payrolls tonight may drive the next move in yields and the USD, while next week’s CPI and PPI should be more decisive in determining whether the recent disinflation trend is sufficient to keep the Fed on hold.”

“Geopolitical tensions remain supportive at the margin, though higher oil prices are a two-sided risk if they feed back into inflation expectations and yields.”

“Gold last at 4474 levels. Mild bearish momentum on daily chart intact while RSI rose. 2-way risks with bias to buy dips. Immediate resistance at 4520/30 levels (200 DMA, 23.6% fibo retracement of 2026 low to Aug high). Decisive break may reopen room for gold to make another attempt around 4700 levels. Support at 4410 (38.2% fibo), 4360 (100 DMA).”