Gold has experienced a remarkable surge, rising over 25% this year and 22% in the past five days alone. OCBC’s latest commentary, led by analyst Afdhal Rahman, highlights the structural factors behind this rally, including persistent geopolitical tensions and policy unpredictability. However, OCBC warns investors not to get swept away by the excitement, as the recent rapid increase in gold prices could lead to near-term pullbacks.
The demand for gold has broadened beyond central banks to include institutional and retail investors, reflecting a structural revaluation of the precious metal. OCBC Research has revised its end-2026 gold forecast to US$5,600 per ounce, citing sustained structural demand. Despite this, the recent parabolic rise in gold prices appears overheated, with the metal trading at extremely overbought levels.
Rahman advises investors to maintain a disciplined approach, suggesting a 5% strategic allocation to gold and staggering entry points rather than chasing the rally. “Gold is no longer just a crisis hedge or an inflation hedge; it is increasingly viewed as a neutral and reliable store-of-value asset,” OCBC Research notes.
The commentary also highlights the potential benefits of a softer US Dollar, which could favour other asset classes such as Asia ex-Japan equities and emerging market bonds. As the gold market continues to evolve, OCBC urges investors to tread carefully and not let their portfolios become overly reliant on a single narrative.
