PRECIOUS METALS | Gold May Stay Useful for Diversification Despite Macro Headwinds

Gold may remain an effective medium-term diversification asset, though its price could be weighed down by a tougher macroeconomic environment, OCBC strategists said in a report. According to Jin10, strategists at OCBC’s Group Research said gold’s medium-term role in portfolio diversification remained valid, but warned that more challenging macro conditions could drag on prices. OCBC analysts said demand for gold could be supported by official-sector buying, noting that central banks in various countries have said they plan to increase gold reserves over the next 12 months. They added that investors have already priced in expectations of U.S. Federal Reserve rate hikes, and that short-term macro pressure from rising real yields and a stronger U.S. dollar was unlikely to fully offset that support. OCBC forecast gold would reach $4,360 per ounce by the end of 2026 and $4,680 per ounce by the end of the second quarter of 2027.