Gold fell a sixth consecutive session on Friday, closing at $1764.16 to lose 6.0% on the week. The bearish pressure could take a breather this week and give some respite to the yellow metal, strategists at OCBC Bank report.
Long-term bearish bias still intact
“Bearish pressure may ebb this week – not because we favour the precious metal, but our valuation model suggests gold is currently trading in the middle of its fair-value range after last week’s sharp selloff. Regardless, our bearish call from two weeks ago has played out nicely.”
“Global assets now look like they are beginning to move in tandem – the decline in Treasury breakeven yields and gold price reinforce the ‘transitory’ inflation idea, while prospects of rate normalisation have dampened riskier assets like equities and commodities.”
“We see gold likely to trade range bound in the short term but stay bearish longer-term.”