Gold prices have surrendered a portion of their recent gains as stickier inflation data pushed bond yields and the US dollar higher, according to a market analysis report by OCBC.
The recent price reaction reinforces that the interest rate channel remains a primary driver for the precious metal. While the broader macroeconomic backdrop has improved relative to previous weeks, persistent inflation signals mean that further easing in global financial conditions cannot be taken for granted.
Despite near-term headwinds from yields and currency movements, OCBC’s weekly tracking metrics reveal an increasingly supportive demand picture:
Gold Exchange-Traded Fund (ETF) holdings have continued to edge higher, reflecting sustained participation from institutional and retail investors.
Net long positions among managed-money accounts expanded in the latest reporting week.
While positioning has rebuilt from earlier lows, it remains below the extended levels recorded during previous market peaks, suggesting room for further participation if macroeconomic conditions align.
US fiscal concerns add another layer of support. Beyond the traditional yields and USD channels, fiscal-credibility concerns may also be contributing to gold’s structural support. US net interest outlays have risen sharply as a share of federal receipts, from around 9% in 2022 to nearly 19% in 2025. Over the same period, gold prices also rose sharply
Looking ahead, CBO projections suggest that net interest costs will continue to rise materially (possibly to 25% of federal receipts in 2036) over the coming decade, reinforcing the view that fiscal constraints are likely to remain a persistent rather than transitory concern.
